New Delhi, Oct. 21 -- India's coal-fired power plants are facing a tightening fuel shortage, with 96 of the country's 191 plants holding stocks sufficient for fewer than three days of generation as of October 19, up from 60 in mid-September, according to Central Electricity Authority (CEA) data. Total coal stocks at power stations have declined by about 5 per cent since the beginning of October, despite government efforts to increase supplies. Rising electricity demand, hotter-than-usual weather associated with El Niño and reduced hydropower generation have increased pressure on coal-based power plants, raising concerns about the country's ability to meet demand in the coming months.
Daily peak electricity demand this year has been 45 gigawatts (GW) to 50 GW higher than a year earlier. Below-normal monsoon rainfall has reduced water availability for hydropower generation, while higher temperatures have increased electricity consumption for cooling and irrigation. As a result, India has relied more heavily on coal-fired generation to maintain supplies.
The strain was evident in September, when the gap between electricity demand and supply reached 560 million kilowatt-hours (kWh), its highest level since August 2023. Coal-fired power generation increased 13.3 per cent from a year earlier that month, while hydropower output fell 20 per cent, CEA data showed. India now obtains nearly 55 per cent of its electricity from non-fossil fuel sources, but limited battery storage capacity means renewable energy cannot always meet demand during peak periods.
The government has put on hold a proposal to require power plants to import coal to replenish stocks, Bloomberg reported on Monday, citing people familiar with the discussions. High international coal prices and a weaker rupee have made imports more expensive. Benchmark thermal coal prices are at their highest in three years, adding to the pressure on energy costs.
Instead, policymakers have asked state-owned Coal India Ltd to increase domestic production and directed the railways to ensure timely deliveries. The government has also ordered more than 100 captive coal-fired power plants to operate at full capacity from October 1 through the end of the year to prepare for higher demand.
The pace of stock depletion has slowed in October. Bloomberg calculations based on power ministry data showed that coal stocks declined by an average of about 48,000 tonnes daily during the first 17 days of the month, roughly one-fifth of September's daily decline.
The coal ministry said daily supplies to the power sector had increased by around 36 per cent from September levels. Rail loading averaged more than 465 rakes a day in October, approaching the target of 470. The ministry said plants with critically low stocks were being monitored and supplies redirected to protect generation. It also clarified that a "critical stock" classification serves as a warning and does not necessarily mean a plant is about to shut down. Cooler temperatures could help demand ease and allow stocks to recover, although forecasts suggest temperatures will remain above the long-term average.
Published by HT Digital Content Services with permission from Millennium Post.