45 Indian power plants face critically low coal stocks as monsoon disrupts supplies

India’s power sector is facing growing fuel supply pressure, with 45 coal-fired power plants reporting critically low coal inventories as of August 25, according to government data, as heavy monsoon rains disrupt coal mining and transportation while electricity demand remains elevated.

The number of plants with coal stocks below 25 per cent of their required inventory, or with enough coal to generate power for fewer than three days, has risen sharply from 31 at the end of July. Of the 45 affected plants, 40 run primarily on domestic coal, data from the Central Electricity Authority (CEA) showed.

The deterioration comes at a critical point in the monsoon season, when heavy rainfall in major coal-producing states such as Odisha, Jharkhand and Chhattisgarh has disrupted mining activity and slowed the movement of coal to power stations.

Coal stocks fall 19% in August

Coal inventories at power plants have fallen 19 per cent from the end of July, commodities consultancy BigMint told Reuters, with stocks at 30.95 million tonnes as of August 25. That is equivalent to roughly 10 days of operational requirement, down from around 12 days in July, according to data cited by Reuters.

The decline is particularly significant because power plants need to maintain sufficient inventories to withstand disruptions during the monsoon, when both mining and rail transportation can be affected.

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The deterioration had already become visible earlier in August. S&P Global Commodities said coal stocks at India’s thermal power plants stood at 34.04 million tonnes on August 18, covering about 11 days of coal burn and only 55 per cent of the normative requirement. Stocks were 34.5 per cent lower than the 51.97 million tonnes recorded on the same date a year earlier.

S&P Global also noted that the number of plants classified as critical had more than doubled from 15 a year earlier to 31 as of August 18, including 24 domestic-coal plants.

Monsoon disruption adds to pressure

Heavy rainfall has created a supply bottleneck even as India’s dependence on coal-fired power generation has increased.

“Coal supplies are running hand-to-mouth,” an official at NTPC, India’s largest thermal power producer, told Reuters. The official said some plants require five to six coal rakes but are receiving only about half that number.

A rake typically consists of a large set of rail wagons used to transport bulk commodities such as coal. A shortage of rakes can therefore directly limit how much fuel a power plant receives, even when coal is available at the mines.

The supply pressure is being compounded by an uneven monsoon. India had received 12 per cent less rainfall than normal by August 25, according to the latest Reuters report. The deficit has increased reliance on coal-fired generation, particularly at night when electricity demand for cooling remains high.

Reuters reported on August 24 that India was heading for its weakest monsoon since 2009, with seasonal rainfall potentially ending around 15 per cent below the long-term average. El Nino conditions are strengthening and are expected to further suppress rainfall in September.

Hot weather keeps power demand high

While weak and uneven rainfall has affected hydropower output, hotter conditions have kept electricity consumption elevated in several parts of the country.

The unusual weather has increased demand for air-conditioning and cooling, creating additional pressure on thermal power plants. Coal is particularly important during evening and night-time periods when solar generation falls but cooling demand can remain strong.

This has created a difficult combination for the power sector: coal deliveries are being disrupted just as thermal generation is being called upon to fill gaps left by weaker renewable and hydropower output.

Power plants asked to defer maintenance

With coal supplies under pressure, the power ministry has asked some coal-fired plants to postpone scheduled maintenance of generating units until the fuel situation becomes clearer, a senior ministry official told Reuters.

Delaying maintenance can help keep generating capacity available during periods of tight supply. However, it is not a substitute for rebuilding coal inventories and could increase operational risks if units continue running for extended periods without planned servicing.

The latest data also point to a widening gap between national coal availability and what individual power stations can actually receive. S&P Global said the problem increasingly appears to be one of distribution, logistics and plant-level availability rather than an outright shortage of coal at the national level.

Imported coal offers limited relief

Imports could provide some support to plants facing shortages, but power producers have been reluctant to increase purchases because imported coal remains expensive on a delivered basis.

S&P Global said thermal coal imports by power plants fell 22 per cent to 12.28 million tonnes in the first quarter of the 2026-27 financial year. Imports by plants designed to run exclusively on imported coal fell 15 per cent, while imports for blending with domestic coal declined 39 per cent.

This leaves domestic supply and rail logistics as the primary sources of fuel for much of India’s thermal generation fleet.

Coal production remains strong nationally

The pressure at power plants does not necessarily imply that India’s overall coal production has collapsed.

S&P Global’s analysis pointed to a growing disconnect between aggregate supply and plant-level availability. At the same time, government data cited in the report showed coal production rising in July, suggesting that transportation, distribution and the timing of deliveries are playing an important role in the inventory squeeze.

The issue is therefore increasingly about getting coal to the right plant at the right time, rather than simply producing more coal.

(With inputs from agencies.)