India's power giants battle low demand as monsoon arrives early

Indian power giants- Tata Power, Adani Power and JSW Energy- are coping with the country’s declining power demand in Q1 FY26. Power consumption between April-June period reduced by 1.3-1.6% in India due to the early onset of monsoon.

“After many years, we had a quarter in which the power consumption declined by nearly 1.3%,” Praveer Sinha, CEO & MD, Tata Power said.

“We have not seen (this) for at least the last 5-6 years and this was because of the early onset of monsoon where we saw the monsoon coming around mid-May and this has continued till now,” he added.

Power consumption grew 11% in the first quarter of FY25, followed by a sluggish demand in the corresponding quarter of the current fiscal year, as stated by JSW Energy.

Last year, an intense heatwave in the first quarter drove up power demand across many parts of India, unlike this year when early monsoon rains have kept temperatures lower.

“In Q1 FY26, the country's power demand registered a year-on-year decline of 1.5%. This moderation was primarily due to a high base effect, stemming from an 11% year-on-year growth in the corresponding quarter of the previous year, coupled with the early onset of the monsoon, which impacted consumption patterns,” Sharad Mahendra, CEO JSW Energy, said.

As monsoon withdraws from most parts of western and central India, companies expect higher power demand in the later part of August and September.

“We anticipate this seasonal demand fluctuation to normalize in the coming quarters and remain structurally optimistic about strong medium-term power demand. Notably, the peak demand during the quarter reached 243 GW in June 2025,” Mahendra said.

Adani Power reported a reduction in Power Purchase Agreements receipts due to weaker power demand in Q1 FY26. However, its sales volume was supported by an additional 2,300 MW capacity acquired last year and higher short-term sales under bilateral and exchange models.

“The recent slackness in power demand affected the offtake of power under ‘Power Purchase Agreements by distribution companies. It also affected tariffs in the merchant market,” Dilip Jha, CFO Adani Power, said.

The company’s receipts for Q1 this year was Rs 6.51 per kWh as against Rs 7.60. per kWh in FY25.

Adani Energy reported that the demand in distribution business remained stagnant, citing early monsoon as the potential cause. However, the company reported a 22% yoy growth in its Mundra distribution company, supported by an increase in industrial demand in Mundra region.

To ensure stable earnings, JSW Energy linked the unused capacity of imported coal-based Vijayanagar plant with JSW Steel. This move helped reduce dependence on the risky merchant market for coal-based power generation.

JSW reported that the merchant market remained resilient during Q1 FY26 averaging around ₹ 4.41 /unit on exchanges despite record capacity addition and lower coal prices. The ‘Day Ahead Market’ rates were flat quarter on quarter but they softened year on year.