Coal Stocks Critically Low at Nearly 40% of India’s Power Plants

Seventy-four plants fall below critical thresholds

Nearly 40% of India’s coal-fired power plants are operating with critically low fuel stocks as hotter-than-usual weather associated with El Niño drives electricity consumption, Reuters reported, citing government data. The number of plants in the critical category rose to 74 as of September 19, up from about 60 a week earlier.

The Central Electricity Authority defines the affected plants as holding less than 25% of their required coal inventory or enough fuel to generate electricity for fewer than three days. The rapid weekly increase leaves a substantial part of India’s thermal power fleet with limited protection against further transport delays or another rise in demand.

Heat and weak hydropower lift coal requirements

India’s peak electricity demand ranged between 230 gigawatts and 250 gigawatts during the past week. Although that was below the record 270.70 gigawatts reached in May, sustained demand at these levels has kept coal-fired generation central to the power system.

Renewable electricity generation increased by about 21% between April and August, according to Crisil. However, the ratings and analytics firm said the intermittent nature of renewable output means coal plants remain essential for meeting round-the-clock consumption. Hydroelectric generation has also remained subdued, reducing another source of flexible supply during a period of unusually hot weather.

Logistics pressure drives utilities toward imports

India’s coal and railway ministries said in early September that they were increasing deliveries to power stations after erratic monsoon rainfall disrupted shipments. Crisil analysts characterized the decline in plant inventories as a temporary logistics problem rather than evidence of structural coal supply constraints. Even so, plants with fewer than three days of fuel have little room for further disruption while nationwide demand remains elevated.

Power producers have already turned to the international market. Indian utilities’ coal imports climbed to a 15-month high in August as the heatwave raised electricity demand and weak hydropower output increased the call on thermal generation, Reuters reported. Imported coal is more expensive than domestic supply, so a prolonged logistics bottleneck could raise fuel costs for generators and increase procurement demand from overseas suppliers.

Inventory recovery depends on steady deliveries

The immediate risk is not a lack of coal in India but the ability to move sufficient volumes to individual plants. Faster rail deliveries could rebuild inventories if electricity demand eases, supporting Crisil’s view that the shortage is temporary. Continued heat or renewed disruption to transport would keep more plants close to minimum operating levels.

For utilities, the priority is securing enough fuel to maintain generation without relying excessively on costly imports. Domestic coal producers and rail operators face pressure to accelerate dispatches, while international suppliers may see additional demand if local deliveries fail to restore stocks. The speed of inventory replenishment will determine whether the current strain remains a short logistical episode or develops into a broader power-sector risk.