Mumbai, Nov. 9 -- India has set a target to increase coal inventories at power plants from about 18 mn tonnes to at least 55 mn tonnes by March 2027, as the government seeks to prevent shortages before summer and elections in several key states. The coal, power and railways ministries jointly agreed on the target, according to people familiar with the discussions.

The planned stockpile would provide roughly three weeks of supplies, in line with the administration's usual requirement, although needs differ between locations. Current inventories remain close to a five-year low of about six days, while nearly half of power stations have critical stocks below a quarter of their required levels.

Coal shortages have affected industries through blackouts and higher energy costs. Weak hydropower generation and strong electricity demand during hot weather have increased pressure on the grid, while Coal India's priority shipments to power stations have reduced fuel availability for factories and businesses with captive power plants.

Inventories have recovered gradually over the past two weeks as temperatures eased. Coal India recorded its highest production for an October and increased shipments to a record level in the previous month, with more than four-fifths of deliveries going to power stations supplying the grid. Indian Railways provided 20 per cent more carriages in October compared with a year earlier, and the power ministry is seeking a further 7 per cent increase by March.

Improved supplies and softer electricity demand have stabilised power provision in areas including Chhattisgarh, where industries experienced blackouts last month. However, businesses operating their own power plants are waiting months for contracted coal and are turning to higher-priced spot auctions or grid electricity.

Paper manufacturers have reported only marginal improvement in fuel availability. Industry representatives have sought government intervention to ease the squeeze, while deteriorating smog conditions in northern India could disrupt rail traffic and further tighten supplies in the coming weeks.

Published by HT Digital Content Services with permission from Construction World.