Coal Stocks at Thermal Power Plants Fall Below Recommended Levels

Syllabus: GS3/Economy 

Context

• Coal stocks at thermal power plants across the country have fallen to less than half the recommended level, with 50 plants classified as having “critically low” inventories.

About

• These 50 plants, with a combined capacity of around 224 GW, had coal stocks of 28.2 million tonnes (MT) against the prescribed requirement of 58.7 MT representing only 48% of the normative requirement.
• The available coal stock was equivalent to around nine days of consumption at an 85% Plant Load Factor (PLF), compared with the normal requirement of approximately 19 days.
• Power plants are classified as facing coal-stock shortages when their inventories fall below 25% of their normative stock requirement.

Coal Production in India

• India, with the fifth-largest coal reserves and being the second-largest consumer, heavily depends on coal.

• In the current financial year, cumulative production through July stood at 302.04 MT, while overall coal dispatches rose by about 6% year-on-year to 354.7 MT.
• Coal stocks available at different stages included 34.55 MT at thermal power plants and around 113 MT at pitheads or in transit. The combined stock was therefore around 148 MT.
• Coal- and lignite-based power plants, with around 230.8 GW of installed capacity, remain critical for India’s energy security.

Reasons for the Decline in Coal Stocks

• Lower and uneven rainfall has increased electricity demand, particularly due to higher use of air-conditioning.
• Cooling demand remains elevated, including during night-time hours when solar power generation is unavailable, increasing dependence on thermal generation.
• The monsoon season annually affects coal mining, transportation and the movement of coal through rail networks.
• India received around 12% less rainfall than normal during the monsoon period, increasing reliance on coal-fired electricity generation.

Government Initiatives

• Coal-stock requirements for thermal power plants have existed for several years.
  • The current Central Electricity Authority (CEA) framework took effect in December 2021, introducing revised, plant-specific stocking norms aimed at strengthening fuel security and inventory planning.
• The revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) policy, approved in 2025, streamlined coal-linkage allocation into two windows.
  • Window I provides coal linkages to central government-owned generating companies and state utilities at notified prices 
  • Window II allows other eligible producers, including imported-coal-based plants, to procure coal through auctions at a premium over the notified price.
• Inter-Ministerial Coordination: The Ministries of Coal, Power and Railways coordinate regularly to monitor coal supplies and facilitate their movement to power plants, particularly during periods of supply disruption.

• Commercial coal mining opened the sector to private players to boost production, efficiency, and competitiveness.
• Coal Mitra Portal developed for flexible coal allocation to power plants, ensuring better coal supply management.

Way Ahead

• India’s recent coal-stock situation highlights that the challenge is not necessarily a shortage of coal at the national level but how efficiently supplies are allocated, transported and converted into adequate plant-level inventories.
• As thermal power continues to play a crucial role in ensuring grid stability, strengthening compliance with stocking norms and ensuring equitable emergency coal redistribution will be essential to maintain reliable and uninterrupted electricity supply.

Source: TH