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India’s Coal Crisis Deepens as Power Demand Surges

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India’s Coal Crisis Deepens as Power Demand Surges
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Indian power generators are preparing for a severe coal shortage, as half of the country's coal-fired plants are operating with critically low stocks. The strain comes amid higher-than-usual electricity demand driven by unseasonably warm weather.

Indian power generators are bracing for a coal supply squeeze, with half of the country’s coal power plant fleet operating with critically low stocks, Reuters has reported, citing higher than usual demand for electricity because of warmer than usual weather for this time of year.

As many as 96 coal power plants in the country only have stocks for three days of consumption, the publication wrote, citing data from India’s Central Electricity Authority. This is up from 60 power plants operating with critically low stocks as of mid-September.

What’s more, since the start of October, total coal stocks at power plants have declined by 5%, the data also showed. This follows a 13.3% increase in coal power generation last month. Yet this failed to close a gap between supply and demand, which, for September, reached 560 million kWh. This was the highest imbalance since August 2023, Reuters noted in its report.

In response to the decline in coal stocks last month, India’s Ministry of Coal said that domestic coal companies were ramping up supply to the coal-fired power plants. The latest update suggests this was not enough to rebalance demand and supply. Daily demand for electricity in the country so far this year has been running at peaks that were 45-50 GW higher than a year ago, Reuters also wrote.

Amid higher power demand and oil and gas disruptions at the Strait of Hormuz, India will see a 4.2% rise in its total coal demand to 1.353 billion tons this year, reversing last year’s temporary slight drop, the International Energy Agency said in its Coal Mid-Year Update 2026 published last month.

The quick buildout of solar is not helping, either, because developers are not pairing the installations with battery storage, leaving output entirely dependent on the weather and disconnected from demand fluctuations.

By Irina Slav for Oilprice.com

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