ICRA raises India’s power demand growth forecast, projects 8.5% expansion in FY27

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ICRA’s FY27 power demand forecast

Highlights

ICRA raised its forecast for India’s power demand growth in FY27 to 8.5%, while demand rose 23.4% in the first 10 days of October 2026.
As of October 10, 2026, coal stocks stood at just six days’ worth, below the standard requirement of 19-20 days and the average level over the past three years.
The average spot power tariff on the Indian Energy Exchange was 7.7 rupees per unit as of October 10, 2026, significantly higher than the 2.6 rupees recorded in October last year.

This article was translated from the original. Read the original version by our correspondent here.

October Surge and Revised Demand Forecast

As Economic Times Energy reported, citing ICRA, data from Grid Controller of India show that India’s electricity demand grew 23.4% year-on-year in the first 10 days of October 2026, prompting the rating agency to raise its forecast for FY27 as a whole. This surge signals the continuation of the strong demand trend seen during FY2027.

Ankit Jain, Vice President and Co-Group Head, Corporate Ratings at ICRA, said electricity demand remains strong even after the peak summer season, supported by above-normal temperatures, sustained cooling needs, and healthy industrial activity. He added that electricity demand growth also remained strong in the first half of FY27, at 10.2% year-on-year.

Pressure on Coal Stocks and Tariffs

ICRA said that as of October 10, 2026, coal stocks stood at around six days’ worth, below the levels seen over the past three years. These stocks also remained below the standard requirement of around 19-20 days, leaving a relatively thin buffer against any disruption in demand or supply.

Jain said domestic coal production fell 3.2% in the first five months of FY2027, mainly due to lower output from Coal India, although coal supplies to the power sector rose 4% over the same period. According to him, if stock levels fall further alongside weaker coal production or supply disruptions, the sector’s ability to meet sharp peak demand could be constrained.

Spot power tariffs on the Indian Energy Exchange averaged 7.7 rupees per unit as of October 10, 2026, up from 7.3 rupees per unit in September 2026 and 2.6 rupees per unit in October 2025. According to ICRA, adequate supply, particularly during solar hours, has led to some sequential softening in tariffs, but strong electricity demand has kept them above year-ago levels; the direction of tariffs in FY27 will depend on the demand-supply balance and the pace at which new capacity is added.

Our previous report discussed the rapid growth in clean energy investment in India and the country’s rise to fifth place in the energy transition investment ranking. We noted that these capital flows could accelerate the expansion of energy infrastructure and renewable capacity, potentially supporting rising electricity needs over the long term.

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