India has increased its FY27 power demand growth forecast to 9% following a surge in consumption. Jefferies warns that low coal stocks at thermal plants pose supply risks despite a strong rise in renewable energy generation across the country.
India Ups FY27 Power Demand Forecast
India’s power demand growth forecast for FY27 has been raised to 9 per cent from 7 per cent earlier, as electricity generation surged amid rising consumption, with Jefferies warning that tight coal stocks at thermal plants could add pressure on supply. In its report, the brokerage firm said power generation in October 2026 was up 24 per cent year-on-year month-to-date, marking the strongest monthly trend in 15 years, barring the post-COVID year of 2021. Power demand had already grown by more than 10 per cent year-on-year so far in the financial year.
“We raise our FY27E demand estimate to 9% vs 7% earlier as YTD it is up 10%+ YoY,” the report said. Jefferies also expects power demand to rise 6 per cent in FY28, with further upside possible if El Niño conditions recur in 2027. It said, “Above normal temperatures and continued rising demand could drive better utilization levels in thermal and RE ahead.”
Thermal and Renewable Energy Performance
The increase in demand has pushed thermal power plant utilisation to 68 per cent in FY27 so far, compared with 62 per cent in the year-ago period. However, coal stocks at thermal plants have fallen to just six days of consumption, against 15 days a year earlier, while renewable energy generation rose 26 per cent year-on-year so far in FY27. Renewable sources accounted for 20 per cent of total power generation in FY27 so far, compared with 17 per cent a year earlier. Solar generation led the increase, rising 47 per cent, while hydro generation declined 12 per cent due to below-average rainfall during the June-September monsoon period.
Market Trends and Future Outlook
The report also pointed to higher prices in the merchant power market, where electricity is traded outside long-term contracts. Average prices rose 46 per cent year-on-year and 12 per cent sequentially to Rs 5.7 per unit in the July-September quarter. Prices in October so far were up 2.6 times year-on-year to Rs 7.1 per unit. Jefferies expects renewable energy project awards to increase as demand recovers. Projects totalling 8.3 gigawatts were awarded in FY27 up to October, compared with 7.7 GW in the corresponding period last year. The brokerage also said renewable energy capacity could account for 52 per cent of India’s total installed power capacity by FY30, compared with 44 per cent currently. It expects total power demand to reach 2,219 billion units by FY30, from an estimated 1,709 billion units in FY26.
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