State-run Coal India has instructed its subsidiaries to ramp up coal supplies to power plants to prevent shortages as India's power demand reaches unprecedented levels due to an intense heatwave. This surge in demand is primarily driven by an El Nino weather pattern, causing significant strain on the power grid.
Supply Chain Adjustments
Coal India has directed its subsidiaries to maximize coal dispatches using all available transport modes, including rail links that facilitate direct coal movement from mines to power plants. The company has urged utilities to build up stocks ahead of peak demand, especially those in logistically challenging areas.
- 21 power plants are currently facing critically low coal stocks, with reserves sufficient for less than a week's demand.
- Coal India and its subsidiaries account for about 80% of India's coal output.
"Despite 228 GW of non-fossil fuel capacity, coal still accounts for more than 70% of India's power generation," according to the Central Electricity Authority.
Production and Inventory Levels
In April, Coal India reported a 9.7% decline in production, totaling 56.1 million metric tons. However, the company holds 168 million tons of coal, including 47.6 million tons at power plants, which is enough to meet 19 days' consumption. Stocks at mines have increased by about 10% from the previous year, standing at 113.5 million tons as of May 23.
| Metric | April 2026 | Change |
|---|---|---|
| Production | 56.1 million metric tons | -9.7% |
| Mine Stocks | 113.5 million tons | +10% YoY |
Demand Dynamics
India's peak power demand recently hit a record high of 270.8 gigawatts (GW). Despite significant non-fossil fuel capacity, coal remains the dominant source for power generation, accounting for over 70% of the total. This reliance on coal is exacerbated by the current heatwave, which has led to increased electricity consumption and power cuts in several regions.
Outlook
The ongoing heatwave and its impact on power demand are expected to continue influencing coal supply dynamics. Coal India's efforts to increase supply and build up reserves are crucial in mitigating potential shortages. Upcoming data releases from the Central Electricity Authority and further weather forecasts will be key in assessing future supply and demand trends.
