Overall coal reserves currently cover needs for only seven days and amount to just 37 percent of the required volume. Experts, however, consider this situation a temporary problem related to logistics.
As of September 24, coal reserves at 80 out of 190 thermal power plants in India were at a critical level. The actual coal reserve at these facilities was 22.3 million tonnes (MT). By September 26, the number of plants with critical reserves decreased to 77, and actual reserves fell to 21.98 MT, which is 24 percent less than the 29 MT on August 31.
In general, the available coal supports operation for only one week and constitutes 37 percent of the required volume. Nevertheless, experts assert that there are no structural problems with the supply of coal to thermal power plants in India. Anujesh Dwivedi, a partner at Deloitte India, noted that the current issue of an increasing number of plants with critically low coal reserves is more of a temporary matter of logistics and warehouse accounting.
The government has already taken several measures, including accelerating the delivery of coal to deficit-suffering power plants and invoking emergency provisions of Section 11 of the Act. These provisions oblige closed power plants of 50 MW and above to operate at maximum available capacity.
On Friday, the Center implemented emergency mechanisms to issue directives to approximately 112 closed coal-fired power plants to operate at maximum capacity from October 1 to December 31. According to the government directive, which relies on Section 11 of the Electricity Act, generators must offer their surplus generation after meeting their own needs through power exchanges in accordance with existing market rules and procedures.
The country is experiencing unusually high electricity demand in September, with peak consumption approaching summer levels. On September 10, peak demand reached 269 gigawatts (GW), the highest figure for the month. The annual peak demand was 270 GW, recorded in May.
Due to the deteriorating coal reserve situation, the government is considering a proposal to mandate the use of imported coal at thermal power plants. Coal reserve levels were similar in October 2023, when reserves dropped to cover about 7.5 days. An even tighter situation was observed in September 2021, when reserves fell to four days due to supply chain disruptions.
The prescribed reserve norm for September is 12 days for mine-based plants and 20 days for non-mine-based plants, which is the lowest requirement for the year. Norms increase after the monsoon season, reaching 17 and 26 days respectively in February and March.
Furthermore, the country is facing an electricity deficit exceeding that observed during heatwaves. According to the Ministry of Power, nighttime deficits in September reached over 7 GW. Simultaneously, hydropower decreased by 12 percent compared to the previous year in the first three weeks of the month due to a weak El Niño-induced monsoon, leading to an 18 percent increase in coal power plant generation in September and an 11 percent increase for the current fiscal year.