Electricity demand growth remained subdued in 10M FY2026; growth estimates of 1.5-2.0% for FY2026. Recovery in demand expected to be 5% in FY2027. Thermal PLF projected to hover at 64-66% for FY2026 and FY2027 amid rising renewable generation. Led by renewables, gross installed capacity addition surged to 39.7 GW in 10M FY2026, with likely total gross addition of 53.5 GW for FY2026.

• All-India electricity demand remained subdued in 10M FY2026, with marginal growth of 0.9% YoY due to prolonged Southwest Monsoons led by heavy rainfall in several regions of the country and an unfavourable base of last year. Considering the slowdown in demand, the growth for FY2026 is estimated at 1.5-2.0% with some seasonal recovery in winter. However, demand growth is likely to rebound to 5% in FY2027, supported by expectations of normalised weather conditions, a lower base, and continued growth in industrial and commercial activity.
• The all-India average thermal plant load factor (PLF) stood at 64.0% in 9M FY2026, reflecting subdued demand growth and rising generation from non-thermal sources. For the full year FY2026, PLF is expected to moderate further to 66.6%, driven by continued softness in demand and a strong ramp-up in renewable energy (RE) generation supported by large-scale capacity additions. However, with a rebound in demand growth in FY2027 coupled with increased renewable and thermal capacity in FY2026 and FY2027, the PLF is expected to remain at 65-66%.

Exhibit 1: All-India thermal PLF trends

Source: ICRA Research, Central Electricity Authority (CEA)