Coal stocks critically low as power demand rises in India

Why in the News

The official position is that India faces no coal shortage, only a surge in power demand, but Central Electricity Authority (CEA) data show 84 of the country’s 191 thermal power plants critically low on stock. The Union Coal and Mines Minister holds that position as power demand grows at its fastest pace in a decade. A weak monsoon has made the grid lean harder on coal.

What does a “critically low” coal stock mean, and why does it matter?

1. What it is: Every coal-fired plant must keep a normative stock, a buffer of coal sized to its daily burn, like a household keeping a week’s rations.
2. When a plant turns critical: The CEA marks a plant critical when its stock falls below 25% of the normative level, or lasts less than three days.
3. Scale of the problem: More than 44% of thermal plants were critical as of September 30.
4. Shortage or demand: Whether the cause is short supply or high demand, the plant faces the same result: coal running out.
5. The takeaway: Coal generates nearly four-fifths of India’s energy, so thin stocks put most power supply at risk.

Why has power demand surged?

1. Record growth: Power demand rose 10% in 2026, the highest year-on-year increase in a decade.
2. Heat drives demand: The International Energy Agency (IEA) links the rise to unprecedented heat. Demand in 2025 rose and fell with each month’s peak temperature.
3. Cooling appliances: The IEA attributes the surge to wider ownership of fans and air conditioners, which run hardest when it is hottest.
4. Hottest August: The India Meteorological Department (IMD) recorded this August as India’s hottest since nationwide records began in 1901, with a mean of 28.01°C.
5. All-time peak: Peak demand hit a record 270.8 GW on May 21 this year.

How has a weak monsoon added to the pressure?

1. Supply shortfall: Power shortages in September 2026 were the highest since August 2023, according to a Reuters report.
2. Hydropower decline: Lower hydropower output pushed the grid to rely more on coal plants.
3. Pacific warming: El Nino, a warming of the central and eastern Pacific, weakens monsoon winds over India. The monsoon was weaker in each of the last six strong-event years.
4. June deficit: June 2026’s rainfall departure, meaning actual rain against the long-term average, was the worst for June since 2014, also a strong El Nino year.
5. Relief is partial: Cooler months will ease demand, but lower pressure on stocks does not mean the supply shortage has eased.

Challenges

1. Coal transport bottlenecks: Plants far from mines depend on railway rakes, so stocks fall fast when movement slows. Eg. Passenger trains were cancelled to move coal in 2022.
2. Hydropower volatility: Dams fail as a backup in drought years, exactly when cooling demand peaks.
3. Evening peak gap: Solar output ends at sunset, leaving coal to meet the evening air-conditioning load.
4. Costly imports: Blending imported coal raises generation costs, which strains distribution companies (discoms).

Way Forward

1. Pre-summer stocking: The Ministry of Power should require plants to build full normative stocks before the hot season.
2. Rail priority: Indian Railways should guarantee coal rakes to plants nearing the critical mark.
3. Storage build-out: Add pumped storage and battery storage so daytime solar can serve the evening peak.
4. Efficient cooling: Tighten energy-efficiency star ratings for air conditioners to slow peak demand growth.

Conclusion

The dispute over whether India faces a coal shortage or a demand surge matters less than the fact that a hotter, drier climate is outrunning the grid’s buffers. Whether stocks recover before the next summer peak is the measure to watch.

Key numbers

1. Coal’s share of energy generated: 79% in 2024-25 (*Energy Statistics India*, Ministry of Statistics and Programme Implementation).
2. Hottest August, departure from normal: 0.67°C above the normal of 27.34°C (IMD, 2026).
3. 2025 temperature range tracked by demand: maximum of 25.53°C in January to an annual peak of 35.97°C in April.

Back2Basics: Central Electricity Authority (CEA)

1. Legal basis: The CEA is a statutory body under the Electricity Act, 2003, attached to the Ministry of Power.
2. Planning role: It prepares the National Electricity Plan and advises the Union government on power policy.
3. Standards: It sets technical standards for building, running and connecting power plants and grids.
4. Data role: It collects and publishes power-sector data, including daily coal stocks at thermal plants.

Matching Previous Year Question

“[2026] In what way(s) does the Vizhinjam International Seaport represent a structural shift in India’s maritime trade and logistics policy? 1. By functioning exclusively as a domestic cargo hub to reduce reliance on coastal shipping and eliminate the need for foreign collaborations. 2. By focusing primarily on passenger cruise tourism and heritage shipping to increase Kerala’s profile as a maritime heritage destination. 3. By leveraging its natural deep draft and strategic location to reduce dependence on foreign trans-shipment ports, enhance revenue retention, and reposition India in regional maritime trade. Select the answer using the code given below: (a) 1 only (b) 1 and 2 (c) 2 and 3 (d) 3 only ANSWER: D”