Almost half of domestic coal-based power plants have critical stocks

Nearly half of domestic coal-based power plants in India have critically low coal stocks, indicating supply-side pressures despite consistent electricity demand, according to recent reports. Out of 176 DCB plants with a combined installed capacity of around 207 GW, 85 had critical coal stocks as of October 25, marking an increase from 81 in the previous 10 days.

The figure peaked at 91 on October 21. However, ICB plants, with a combined capacity of 17.77 GW, had seven plants with critical stock levels throughout the period. Coal stocks at DCB plants fell to 17.67 million tonnes on October 25 from 18 million tonnes on October 16, while ICB plants' stocks decreased to 2.26 million tonnes from 2.42 million tonnes over the same period.

Coal stocks at power plants serve as a buffer against supply disruptions, ensuring continuous operations. DCB plants' coal stocks have declined sharply over the past three months, from 35.13 million tonnes at the end of July to 26.04 million tonnes at the end of August. The number of DCB plants with critical stocks remained at 85 from October 21 to 25, while ICB plants' critical stock count remained at seven.

Ankit Jain, Vice-President and Co-Group Head of Corporate Ratings at ICRA, stated that coal stocks stood at around six days' requirement as of October 10, below the normative requirement of 19–20 days. This thin buffer could limit the sector's ability to meet sudden demand surges or supply disruptions if inventories continue to decline, especially if accompanied by weaker coal production or supply constraints.

Demand for electricity grew 23.4 percent year-on-year during the first 10 days of October, driven by higher-than-normal temperatures, sustained cooling needs, and robust industrial activity. Despite the end of the peak summer season, electricity demand growth remained robust at 10.2 percent year-on-year in the first six months of FY27.