Rating agency ICRA in its latest report has said that the power demand is likely to increase by 5.0-5.5% in 2026-27 against a tepid around 1% in 2025-26, supported by the agricultural and household sectors given the expectation of sub-par rainfall amidst a potential El Nino, along with demand from industries as well as from emerging sources like electric vehicles and data centres.
The agency noted that the all-India thermal plant load factor (PLF) level fell to 65-66% in 2025-26 amid demand moderation and is likely to remain around 65% in 2026-27, given the healthy growth in generation expected from the renewable sources and 6-GW capacity addition likely in the thermal segment.
It further said that the slowdown in demand growth and significant increase in supply amid healthy addition in RE capacity resulted in moderation in the average spot power tariffs in the day ahead market (DAM) of the Indian Energy Exchange to Rs. 3.8 per unit in 2025-26 from Rs. 4.4 per unit in 2024-25. Besides, the coal stock level for the domestic power plants has been comfortable at around 19 days as on April 8, 2026, following improved local supply.
As per the report, the book losses of the distribution companies at the all-India level improved in 2024-25 over 2023-24 with moderation in the gap between cost of supply and tariff realisation. The gross debt for state-owned discoms reduced to Rs. 7.1 trillion as of March 2025 from Rs. 7.4 trillion as of March 2024. However, such high debt levels are unsustainable for discoms, given their current revenues and profitability.
