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The third-warmest January in 125 years and industrial activity lifted demand for electricity 2.2 per cent (year-on-year) to 138 billion units (BU) in the first month of 2025, according to a report on Tuesday. 

In January, peak power demand is estimated to have risen 14 GW on-year to 237 GW. On the other hand, power generation rose an estimated 3.9 per cent on-year to 149 BU in January, surpassing typical monthly demand.

Real-time market (RTM) volume surged 27 per cent on-year to 3,036 million units (MUs), while the day-ahead market (DAM) spiked 8 per cent to 6,015 MU. Overall RTM volume at the Indian Energy Exchange (IEX) rose 400 basis points to 26 per cent on-year in January, according to the report by Crisil Intelligence.

The India Meteorological Department (IMD) said the all-India mean temperature in January was 0.94 degree Celsius higher than the average of 18.04 degree Celsius seen since 1901.

Typical heating requirements, a key driver of power demand, was subdued this time because of warmer and drier weather conditions. While temperatures have been warmer across the nation, growth in power demand has not been uniform on a regional level, the report mentioned.

Power generation rose an estimated 3.9 per cent on-year to 149 BU in January, surpassing typical monthly demand.

Coal generation inched up 0.8 per cent on-year on a high base of 10 per cent on-year growth last fiscal. Generation of hydro, nuclear and renewable energy rose 24 per cent, 15 per cent and 24 per cent on-year, respectively.

Additionally, manufacturing activity continues well, as underscored by the Purchasing Managers’ Index (PMI) reading 57.7 for January, well above the mark of 50 that underscores expansion.

With nearly half of India’s power demand coming from industrial and commercial consumers, expansion of relevant activities is crucial for power demand to continue growing. Between April 2024 and January 2025, power demand is estimated to have increased 4.2 per cent on-year, the report noted.