Why Did Electricity Demand Surge in July?
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Synopsis
India's electricity demand experienced a significant uptick in July, marking a 2.4% increase year-on-year. This shift highlights a recovery in industrial activity after two months of decline. With a projected growth of 2.5 to 3.5% for the fiscal year, the energy landscape is evolving. Discover the factors driving this change.
Key Takeaways
- 2.4% increase in electricity demand in July compared to last year.
- Industrial activity has been a key driver of this rise.
- Average market clearing price dropped by 23% year-on-year.
- Hydropower generation increased by 36% due to higher rainfall.
- Coal's contribution to power output decreased to 63%.
New Delhi, Aug 12 (NationPress) India's electricity demand saw an increase of 2.4 percent in July, reaching a total of 154 billion units (BUs), compared to 150 BUs in the same month last year, largely propelled by robust industrial activity, as reported on Monday.
This uptick in demand stands in stark contrast to the dips recorded in May and June, which experienced year-on-year declines of 4.8 percent and 2.3 percent, respectively, according to insights from Crisil Intelligence.
In July, the average market clearing price (MCP) in the real-time market (RTM) decreased by 23 percent year-on-year to Rs 3.83 per unit, suggesting an adequate supply amidst lower electricity demand. The gap between RTM and DAM (day-ahead market) volumes shrank to 401 million units (MU) in July, down from an average of 2,529 MU from June 2020 to July 2025.
Although thermal power generation saw a year-on-year decline this July, output from key clean energy sources, such as hydro and renewable energy, increased significantly. The rise in rainfall led to a 36 percent year-on-year boost in hydropower generation, while renewable energy output rose by 7.2 percent, the report indicated.
As a result, coal comprised 63 percent of the overall power generation, down from 66 percent a year prior, underscoring the fuel's flexibility in response to demand fluctuations. By the end of July, coal inventory was at 18 days, compared to 21 days in May and June, with thermal power plants holding 54 million tonnes (MT) of coal stock.
Crisil Intelligence projects a 2.5 to 3.5 percent year-on-year growth in electricity demand for this fiscal year, totaling around 1,745 BU, a moderation from the 4.2 percent growth of the previous fiscal year.
The IMD anticipates another productive southwest monsoon season, which is expected to lower ambient temperatures and consequently reduce electricity demand.
–IANS
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Point of View
It is evident that India’s electricity demand rebound in July is a significant indicator of economic activity. This increase, influenced by industrial growth and favorable monsoon conditions, suggests a positive shift in the energy sector. Our commitment to reliable data ensures that we keep our audience informed about trends affecting both consumers and industries.
NationPress
09/09/2025
Frequently Asked Questions
What caused the rise in electricity demand in July?
The rise in electricity demand in July was primarily driven by strong industrial activity following two months of decline.
How much did the average market clearing price fall?
The average market clearing price in the real-time market fell by 23% year-on-year to Rs 3.83 per unit.
What was the coal inventory situation?
By the end of July, the coal inventory stood at 18 days, with thermal power plants holding 54 million tonnes of coal.
