Officials have indicated that the primary focus is on replenishing coal inventories ahead of the upcoming summer, as stocks at domestic coal-powered plants have significantly declined. The reserves have fallen by 66%, dropping from approximately 54.9 million tonnes at the start of April to just 18.6 million tonnes by the end of September, leading to a “neck-and-neck situation.”
Recent rainfall in parts of northern and eastern India has contributed to a slight decrease in electricity demand. Officials remain optimistic that demand will continue to decrease as the intense summer heat subsides, transitioning the country into a post-summer consumption phase. This anticipated reduction in demand is expected to alleviate some of the strain on coal-based power plants, allowing them to rebuild their stockpiles by March, as reported by The Indian Express.
A senior official involved in power system operations noted, “The concern is not for this year but for next year. This year will be tight since thermal power plants are under significant pressure due to a lack of hydro-power resulting from rainfall deficits. Our main objective is to restore stock levels by March before the next summer arrives.”
This year’s depletion of coal inventories is the most significant observed in the last three years. The decline in fuel reserves at coal-based power plants has reached around 66%, contrasting with a 23% reduction during the same timeframe last year, when reserves fell from 55.2 million tonnes in early April to 42.6 million tonnes by the end of September. In comparison, the decreases for the same period were 31.8% in 2024 and 36.8% in 2023.
Officials anticipate improvements in the situation due to better availability of railway rakes for coal transportation and an increase in coal production. Coal India Limited, the largest coal producer in the country, which provides approximately 83% of the coal for the power sector, reported a 9.18% rise in coal production for September compared to the same month last year.
The state-owned miner communicated that coal supplies to the power sector also saw a robust growth of 10.63%, increasing from 44.20 million tonnes to 48.90 million tonnes in the same month.
Logistical challenges, particularly in the availability of railway rakes, heavily influence coal supplies to thermal power plants, as many of India’s operational coal-based generation facilities are situated far from coal mines. A senior official stated, “October and November are generally critical months for stock replenishment as demand tends to moderate during this time. Although there is some heating demand during peak winter, this is traditionally when coal inventories increase.”
This year, an unexpected surge in demand has raised alarms regarding power availability, prompting the government to implement additional measures to optimize generation from existing capacity. The power ministry has instructed approximately 112 captive coal-based power plants to operate at full capacity from October 1 through December 31.
Discussions are also underway regarding the blending of imported coal with domestic supplies at thermal power plants, although no definitive conclusion has been reached yet. While the government has previously issued advisories on this blending process, such advisories have not extended beyond October 15, 2024.
Simultaneously, there is a push to enhance the installation of battery energy storage systems (BESS) over the next six months, particularly at the inter-state transmission system (ISTS) level. This initiative aims to bridge the gap between solar power availability during the day and the heightened electricity demand that occurs after sunset, when solar generation experiences a significant drop.
A senior official indicated that several major renewable energy companies are planning to add approximately 10 GW of battery energy storage capacity by March. “This will greatly benefit the system, especially during the evening and night hours when the grid experiences more stress,” the official added.
As of the time this report was prepared, inquiries directed to the Ministry of Power had not received a response.
