Nearly 40% Of India’s Coal Power Plants Face Low Fuel Stocks Amid Rising Electricity Demand

Nearly 40% of India’s coal-based power plants are operating with critically low fuel inventories as increased electricity demand and weather conditions linked to El Niño put pressure on coal supplies, Reuters reported citing government data.

The number of plants with coal stocks below critical levels increased to 74 as of September 19, compared with around 60 plants a week earlier, according to daily data from the Central Electricity Authority.

These plants either have less than 25% of the required stock or enough coal to operate for fewer than three days.

Rising power demand puts pressure on coal supplies

India’s peak electricity demand has remained between 230 gigawatts and 250 gigawatts over the past week, after touching a record high of 270.70 gigawatts in May.

However, analysts said the decline in coal stocks appears to be a short-term supply chain challenge rather than a structural shortage. Crisil analysts noted that logistical disruptions have affected coal movement, particularly after irregular monsoon rainfall impacted transportation.

The coal and railway ministries had earlier announced measures to increase coal movement to power plants following supply disruptions caused by the uneven monsoon.

Coal remains key despite renewable growth

Renewable energy generation increased about 21% between April and August, but coal-fired power continues to remain essential for meeting round-the-clock electricity requirements because renewable sources are intermittent.

The pressure on domestic coal supplies has also led power producers to increase imports. Coal imports by Indian utilities rose to a 15-month high in August as high temperatures lifted electricity consumption and weaker hydropower generation reduced alternative supply.

The government continues to focus on improving coal availability and transportation to ensure adequate fuel stocks at power plants. While renewable capacity is expanding, coal remains the backbone of India’s electricity system during periods of high demand.