Over half of coal plants face critically low fuel stocks as demand surges

A coal-fired power plant needs a steady fuel supply to keep generating electricity. In this article, “critically low” stocks mean the plant has coal for fewer than three days of generation. The label matters because it signals that deliveries must be watched closely, especially when electricity demand is high.

The Central Electricity Authority counted 96 plants with critically low stocks on October 19. The coal ministry said this classification is a warning and does not necessarily mean a plant is running out of coal or will shut down. Plants with low stocks are being monitored, and supplies are being redirected to them.

The warning still shows how little room many plants have. Coal stocks have fallen to their lowest level in nearly five years. If deliveries do not keep pace with use, more plants could face pressure to reduce generation, increasing the risk of electricity shortages.

India’s coal shortage is broad rather than limited to a few power stations. On October 19, 96 of 191 plants reported critically low stocks. That was up sharply from 60 plants in mid-September, showing that the problem spread quickly as demand rose and hydropower weakened.

The critical-stock plants had coal that could generate electricity for fewer than three days. CEA data also showed 87 of 190 plants in this category on October 8, compared with 50 in the first week of September. Overall stocks fell about 5% since the beginning of October and reached their lowest level in nearly five years.

The figures indicate limited operating flexibility. Plants are still generating power, but many have little fuel cushion if deliveries are delayed or demand stays high. The government is therefore monitoring plants, redirecting supplies, and asking Coal India and the railways to improve deliveries.

Higher deliveries do not automatically rebuild stocks. Coal inventories fall when plants consume fuel faster than they receive it. India’s electricity demand has climbed, while weaker hydropower has forced coal plants to produce more. This has increased coal use even as the government reports better daily supplies.

The coal ministry said daily coal supplies to the power sector rose about 36% from September levels. Yet coal-fired generation increased 13.3% year on year in September, while hydropower generation fell 20%. Plants therefore had to burn more coal to cover the missing hydropower and meet demand.

The pace of decline slowed in October, but stocks still fell. Domestic coal plants lost around 48,000 tonnes daily during October 1-17, about one-fifth of September’s daily decline. The figures suggest improved deliveries are helping, but have not yet fully matched consumption or rebuilt inventories.

Weather has squeezed India’s power system from both sides. Higher temperatures increase electricity use, especially for cooling and irrigation. At the same time, below-normal monsoon rainfall reduces the water available for hydropower. With less electricity from dams, coal plants must supply a larger share of demand.

Daily peak electricity demand this year was 45 to 50 GW higher than a year earlier. In September, coal-fired generation rose 13.3%, while hydropower generation fell 20%. The supply gap reached 560 million kilowatt-hours, the highest for that month since August 2023, even after coal plants increased output.

This combination makes coal stocks fall faster. Plants are producing more electricity precisely when their alternative fuel source is weaker. Temperatures are expected to ease slightly over the next two weeks, which could slow coal use, but forecasts still put them above the 30-year average.

Coal stocks are the fuel buffer behind India’s electricity supply. If that buffer keeps shrinking, plants may have less ability to maintain output when demand peaks. The immediate concern is a wider gap between electricity demand and supply, particularly because hydropower is already contributing less.

September showed the pressure clearly. The electricity gap reached 560 million kilowatt-hours, the highest for that month since August 2023. Coal plants raised generation by 13.3% from a year earlier, but their stocks still fell. Nearly half of the monitored plants had fewer than three days of fuel on October 19.

Low stocks do not necessarily mean plants will shut down. The coal ministry calls the classification a warning and is redirecting supplies to vulnerable stations. Falling temperatures may reduce demand and allow stocks to recover. But if demand remains high and deliveries lag, reliable generation will become harder to sustain.

India’s main response is to strengthen the domestic coal pipeline. Policymakers have asked Coal India Ltd to increase production and the railways to deliver coal to power stations on time. Lower electricity demand as temperatures fall could also give plants time to rebuild their stocks.

Imports were considered as another option. The government had discussed requiring plants to mix imported coal with domestic supplies. However, benchmark thermal coal prices are at their highest level in three years. A weaker rupee would make those purchases even more expensive, while higher oil prices are already increasing the energy import bill.

The government has therefore shelved compulsory imports and is focusing on local production and transport. It has also ordered more than 100 captive coal plants to operate at full capacity through the end of the year. Whether stocks recover depends on deliveries, demand, and hydropower output.

Electricity supply and demand must match continuously. Generation capacity provides the ability to make power, but capacity is useless if coal plants lack fuel. Deliveries therefore determine whether available plants can actually operate when households, businesses, cooling systems, and irrigation need electricity.

Storage adds another layer of flexibility. India gets nearly 55% of its generation from non-fossil sources, but the article says it lacks enough batteries to store clean electricity. When hydropower falls and demand rises, coal plants must fill the gap. Without storage, electricity made at another time cannot easily cover that peak.

The current coal shortage shows how the parts interact. Hotter weather lifted demand, weak monsoons reduced hydropower, and coal plants increased output. If generation capacity exists but fuel deliveries or storage are inadequate, the supply gap can widen. A balanced system needs all three resources working together.