American Marconi Wireless News - Critical coal inventories affect nearly half of India’s domestic power plants

Nearly half of domestic coal-based (DCB) power plants have critically low coal stocks, highlighting supply-side pressures against a backdrop of sustained electricity demand.

Of the 176 DCB power plants, with a combined installed capacity of around 207 GW, 85 had critical coal stocks as of October 25. almost half of the country’s 15 imported coal-based (ICB) power plants, with a combined capacity of about 17.77 GW, were also facing critical stock levels.

The number of DCB plants with critical stocks — defined as less than 25% of the normative coal stock requirement — rose to 85 from 81 in the 10 days ended October 25. The count peaked at 91 on October 21, the highest level this year.

The number of ICB plants with critical stocks remained at seven during the period.

Coal stocks at DCB plants declined to 17.67 million tonnes (mt) on October 25 from 18 mt on October 16. Stocks at ICB plants fell to 2.26 mt from 2.42 mt over the same period.

Coal stocks at power plants act as a buffer against supply disruptions, helping ensure continuity of operations. Plants receive coal on a daily or ongoing basis.

Dip in inventories

Coal stocks at DCB plants have fallen sharply over the past three months, from 35.13 mt at the end of July to 26.04 mt at the end of August. Inventories stood at 25.57 mt on September 1 before declining further to 18.60 mt on October 1.

Stocks at ICB plants stood at 2.89 mt on July 31 and rose to around 3.06 mt by August 31. They subsequently declined to 2.46 mt on October 1.

Thin buffer

Ankit Jain, Vice-President and Co-Group Head of Corporate Ratings at ICRA, recently said coal stocks stood at around six days’ requirement as of October 10, below the levels recorded over the past three years.

Stocks also remained below the normative requirement of around 19–20 days, leaving a thinner buffer against demand surges and supply disruptions.

“Domestic coal production declined by 3.2% year-on-year in the first five months of FY27, largely due to lower output from Coal India. However, coal supply to the power sector increased by 4% year-on-year during the period,” Jain said.

A further decline in inventories, particularly if accompanied by weaker coal production or supply constraints, could limit the sector’s ability to meet a sharp surge in peak demand. A sustained recovery in coal production and supply will be important to rebuild adequate buffer stocks, he said.

Citing Grid Controller of India (GCIL) data, Jain said electricity demand grew 23.4% year-on-year in the first 10 days of October, extending the strong demand trend seen in FY27.

“Supported by higher-than-normal temperatures, sustained cooling requirements and healthy industrial activity, electricity demand remained resilient despite the end of the peak summer season. Consequently, electricity demand growth remained robust at 10.2% year-on-year in the first six months of FY27,” he added.

A.Rodriguezv--AMWN