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Informist, Friday, Sept. 18, 2026

NEW DELHI – Coal inventories at domestic thermal power plants plunged almost 42% to 29 million tonnes in August from 50 million tonnes a year ago, Crisil Intelligence said in a report Friday. This was due to a 13% surge in power demand, according to the report. 

Consequently, coal stock cover nearly halved to nine days from 17 days a year earlier, the lowest level since November 2023, the report said. "The sharp depletion was concentrated among plants dependent on domestic coal, highlighting the challenges of timely inventory replenishment amid elevated power demand and coal consumption."

Between April and August, coal consumption by thermal plants rose almost 8% on year to 395 million tonne, driven by a 9.5% increase in power demand following an abnormally hot summer and a below-normal southwest monsoon, as per the report. Between June and August, the cumulative rainfall was 13% below the long-period average, it said. 

While power generation rose almost 10.5% on year between April and August, renewable energy generation surged 20.7% on year. "But its intermittent nature meant coal-fired power continued to play a critical role in meeting round-the-clock demand. As a result, 51 of the country's 190 thermal plants were operating with critically low coal stocks in August, compared with 20 a year earlier," the rating agency said.

Among states, inventories stress was concentrated in Rajasthan (72%), Madhya Pradesh (69%) and Andhra Pradesh (60%), where coal-based generation capacity was operating with critically low coal stocks, as per the report. The Central Electricity Authority deems coal stocks at power plants critical when they fall 25% below the normative level, it said. In the eastern region, Bihar (45%) and Jharkhand (48%) also faced considerable stress. In contrast, Odisha (10%) and West Bengal (6%) remained relatively better placed.  

"India's pithead inventories moderated sharply from a peak of 157 MT (million tonnes) in early March 2026 to ~76 MT in August 2026, reflecting the normalisation of elevated stocks. Current levels remain broadly aligned with the average of 76.1 MT recorded across August 2024 and 2025. This indicates that despite the significant drawdown, coal availability is adequate and there is no material supply-side stress," Sehul Bhatt, director, Crisil Intelligence, said in a statement. 

Notably, a key challenge has been the mismatch between rising demand and transportation capacity, as per the rating agency. The mining operating and coal evacuation was disrupted due to the prolonged rains across the eastern coal belt, the rating agency said. "During April-August, rake loading increased only around 5% and coal receipts 3%, even as coal consumption surged. Consequently, incremental evacuation was insufficient to replenish inventories at power plants." 

The rating agency expects the electricity demand, coal-based generation, coal consumption and coal dispatches to power plants to grow in a narrow range of 6-7% on year. "Power demand is estimated at 860-870 billion units, while coal-based generation is likely to retain its dominant 65-70% share of India's electricity mix. Given adequate inventories at miners and improving evacuation logistics, higher dispatch requirements should be met comfortably," Surbhi Kaushal, associate director, Crisil Intelligence, said in a statement.  End

Reported by Astha Oriel

Edited by Avishek Dutta

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