Power demand likely to rise by over 5% in 2026-27: ICRA

NEW DELHI: India's power demand is likely to rise by over 5% in 2026-27 as against just 1% growth recorded in the last financial year, ratings agency ICRA said on Thursday.

It said that growth in 2026-27 is likely to be supported by agriculture and household sectors, given the expectation of sub-par rainfall because of potential El Nino conditions, along with demand from industries as well as emerging sources like electric vehicles and data centres.

Peak power demand in summer of 2025-26 stood at 242.8 GW, as against 250 GW a year earlier, though it crossed 245 GW later in the fiscal year. Power ministry has projected peak demand to reach 270 GW this year.

Ankit Jain, vice president and co-group head - corporate ratings at ICRA, said thermal power sector in India is witnessing renewed investment emphasis, while renewable capacity continues to expand at a rapid pace.

“Thermal power acts as a reliable base-load supply, aiding grid stability amid expectations of power demand growth,” he said, adding that coal stock at power plants were at comfortable levels of around 19 days.

ICRA also said that the collective book losses of distribution companies had improved in 2024-25 over previous fiscal year, while gross debt of state-owned discoms fell to Rs 7.1 trillion in March 2025 from Rs 7.4 trillion a year earlier.

“Such high debt levels are unsustainable for discoms, given their current revenues and profitability,” agency said.

It also noted that 17 out of 28 states had issued tariff orders for 2026-27, but the hikes approved for the year were largely muted.

Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.