Electricity Demand in India Rises 2.5% in July After Weak Q1: ICRA

India's electricity demand rose 2.5% year-on-year in the first 27 days of July 2025, rebounding after a 1.4% year-on-year (YoY) decline in the April-June quarter, according to a recent report by the credit rating agency ICRA. The news is bound to bring some relief to power generators across the spectrum, including renewable developers.  

The ICRA attributed the previous dip to lower consumption driven by the early onset of the southwest monsoon. The July rebound, based on provisional data from the Power System Operation Corporation (POSOCO), indicates a recovery in demand.

Modest Growth Expected

ICRA said, “The demand growth is expected to remain modest in the near term amid expectations of an above-average monsoon." It further added, "However, it is likely to recover after the monsoon, with full-year demand growth projected at 5.0-5.5% for FY2026, trailing ICRA's GDP growth estimate of 6.2%” 

Impact On Spot Power Tariff 

The ICRA report also offers insight into the spot power tariffs, stating,  “Spot power tariffs remain at Rs. 4.3 per unit in July 2025, higher than in June 2025. On the Indian Energy Exchange (IEX), spot power tariffs averaged Rs. 4.3/unit as on July 28, 2025, above June 2025 levels of Rs. 3.9/unit. However, prices were lower than those recorded in July 2024 due to subdued demand growth.”

Coal Stock Levels Remain Healthy

ICRA also noted a healthy coal stock at power plants at 18.6 days in July 2025. It mentioned, "As of July 24, 2025, coal stock levels at power plants stood at 18.6 days, marking a significant improvement from the lows observed in September 2024."

It explained, "Over the past three months, coal inventories have consistently remained around a five-year high of approximately 20 days. This healthy stock position is a positive indicator for the power sector, although a few state utilities continue to face a shortfall in coal availability."