Mint Explainer | Why India’s winter power spike matters after a muted year for electricity demand

Key Highlights

• Delhi recorded its coldest December day in six years on 31 December 2025. National peak demand rose steadily through the month, from 206 GW on 1 December 2025 to 241 GW at month-end.
• Power consumption increased nearly 7% year-on-year to 138.39 billion units (BU) in December, compared with 129.39 BU a year ago, with most of the increase coming from households and commercial establishments. Also Read | Springboard 2026 | Energy future hinges on storage, transmission, nuclear powerWhy does a rise in electricity demand matter, and what does it mean for consumers?A sudden rise in electricity demand matters because it affects how power distribution companies (discoms) source electricity, and how much it costs them. Discoms typically meet most of their demand through long-term power purchase agreements (PPAs), often running for 25 years.
• But when demand rises unexpectedly, they have to procure additional electricity from short-term markets such as power exchanges, where prices tend to spike during high-demand periods.
• These higher procurement costs strain discom finances and are often passed on to consumers through higher tariffs in subsequent tariff orders. In simple terms, sharp demand spikes today can translate into higher electricity bills later.
• At the same time, a sustained increase in demand, especially from industries, can also signal stronger economic activity. What was the trend in power demand in 2025?Despite the December spike and a brief surge in July, electricity demand in 2025 was largely muted.