Coal stocks at Indian thermal power plants have come under pressure as electricity demand remains unusually high for September. As of September 9, 59 coal-fired power plants were operating with critically low stocks, up from 45 plants at the end of August, according to data from the Central Electricity Authority. The latest situation has increased pressure on the coal supply chain even as Coal India and the government have stepped up deliveries.
The CEA considers a plant to be in the critical category when its coal inventory is below 25% of the required level or is sufficient for less than three days of generation. The number of such plants has therefore increased significantly in a relatively short period. The latest figure represents nearly one-third of India's coal-fired power plants, making coal availability an important issue for the power sector at a time when electricity consumption remains elevated.
Power demand has been one of the main factors behind the tighter situation. India's peak electricity demand has been running close to the record 270.70 GW reached in May, with demand touching around 267 GW on several recent days. Higher cooling requirements during the prolonged hot weather have kept consumption high, while lower water reservoir levels have also put additional pressure on thermal generation.
The increase in demand is coming at a time when the monsoon has affected coal mining and transportation in several parts of the country. Heavy rainfall can slow mine operations and make movement of coal by road and rail more difficult. Recent improvement in weather has allowed Coal India and its subsidiaries to increase production and dispatches, but the recovery in mine-side supply has not yet fully translated into comfortable inventories at all power plants.
Rail movement has been increased to address the shortage. India deployed 444 coal rakes on September 6, compared with 370 rakes on September 3, to move additional coal towards power plants. Coal India and its subsidiaries have also increased road-based shipments as part of the effort to improve deliveries.
The situation is somewhat different at the mine end of the supply chain. Coal India reported around 76 million tonnes of coal stocks at its pitheads, indicating that the country has coal available but that moving sufficient quantities to individual power plants remains an important part of the current challenge. This makes railway availability, road movement and the distribution of coal across generating stations particularly important in the near term.
Data from September 9 showed total coal stocks at Indian power plants at around 25.84 million tonnes, down 8.27% week on week, according to CEA data reported by Sxcoal. The number of plants classified as critical also increased from 50 a week earlier to 59. Of these, 53 plants were dependent on domestic coal, highlighting that the issue is not limited to imported-coal-based generation.
The government has been increasing coal movement as the pressure on power plants has grown. The latest response includes higher railway rake deployment and additional road transportation, while Coal India has also been working to raise production and dispatches after the recent weather-related disruptions. Earlier this week, Coal India's daily production increased to around 1.91 million tonnes, while supplies to the power sector rose to around 1.74 million tonnes per day on September 8.
The development is important for the Indian coal and metals industry because thermal power remains a major source of electricity for the country's industrial base. Steel, aluminium, cement and other energy-intensive industries depend on reliable power availability, particularly during periods of high demand. For now, the key issue is whether the higher coal production and transportation seen in recent days will be enough to rebuild inventories at the plants that are currently running with limited fuel cover.