India’s domestic coal-powered thermal plants are on track to achieve a combined coal inventory of 55 million tonnes (MT) by March 31, 2025, a notable increase from 47 MT recorded just a year earlier, according to official sources. While these stock levels are reassuring and should prevent any operational disruptions, they still fall short of the optimal requirement of 67.29 MT for this time of year.
Government Initiatives to Boost Coal Supply
The coal ministry is actively working to secure sufficient coal supplies to meet the escalating power demand. Officials are optimistic about a 6-7% increase in coal production for the upcoming fiscal year, indicating a proactive approach to future energy needs.
- Starting the fiscal year 2024-25, coal stocks at power plants were at 47 million tonnes.
- The expected closing stock for March 31, 2025, is projected at 55 MT, reflecting an increase in supply to the sector.
An official noted, “Despite experiencing stock depletion towards the year-end, we will still retain a higher coal inventory compared to last year.”
Year-End Coal Stock Projections
Historically, coal stocks tend to dip by 17 MT-18 MT around October each year. Last year saw a minimum stock level of 30 MT in October, but this year is projected to maintain 38 MT post-depletion, which exceeds last year’s figures.
The government anticipates coal production to hit 1.13 billion tonnes for the financial year 2025-26, while the target for the current fiscal year is set at 1.08 billion tonnes. Impressively, as of March 20, 2024, coal production has already surpassed 1 billion tonnes, achieving this milestone 11 days earlier than the previous fiscal year.
Captive Mines and Production Growth
Of the anticipated 1.13 billion tonnes for FY26, the coal ministry estimates that 203 million tonnes will come from captive mines. In FY25, both captive and commercial mines have already produced 191 million tonnes, exceeding this year’s target of 170 million tonnes.
Analysts have observed an improvement in coal stock availability compared to last year, with expectations for further increases. “The sector’s capability to utilize imported coal-based plants is also in a favorable position,” stated Vikram V, Vice President of Corporate Ratings at Icra.
Rising Power Demand and Coal Requirements
The government forecasts peak power demand could surpass 270 gigawatts (GW) in FY26. To accommodate this anticipated surge, the power sector has requested 906 MT of coal from the coal ministry, up from 874 MT in FY25.
Additionally, coal dispatches are expected to see a 6% year-on-year increase in the upcoming fiscal year.
- Currently, there are approximately 90 MT of coal at mining sites and 54 MT at power plants.
- The total coal inventory, including those in transit, reaches 183 MT, which is sufficient for 73 days of operation.
As reported by the National Power Portal, coal stocks at domestic coal-powered plants stood at 54.2 million tonnes as of March 27.
Future Power Capacity Additions
According to Ghanshyam Prasad, Chairperson of the Central Electricity Authority, the peak demand for power has been rising at a compound annual growth rate (CAGR) of 6% and is projected to escalate to 7% over the next five years, fueled by economic growth and new industrial developments. The CEA anticipates that 43 GW of new power capacity will be added by the end of March 2025, including:
- 10 GW of coal-based capacity
- 30 GW of solar and wind capacity
- 3 GW of hydro capacity
- 700 MW of nuclear capacity
To address the growing demand, the power ministry has issued directives for imported-coal based plants to operate at full capacity until April 2025, reinforcing their commitment to energy stability.
In summary, last year’s initiatives included activating Section 11 of the Electricity Act, 2003, compelling all imported coal-based power plants to maximize their output. This coordinated effort between the power and coal ministries aims to ensure an adequate coal supply to thermal power plants, with last year’s peak demand reaching 250 GW.
