Coal stocks under pressure but generation steady
Thermal power plants entered September with coal inventories at 18.6 million tonnes (MT), down from 25.4 MT at the start of the month and far below the normative 55 MT required for smooth operations. The dip was driven by a perfect storm: heavy monsoon showers in the coal‑rich states of Odisha, Jharkhand and Chhattisgarh hampered mining and transport, while demand‑centres saw no rain and consequently higher electricity consumption.
Despite the thin stocks, Power Secretary **Pankaj Agarwal** told *Moneycontrol* that power generation has not been disrupted. “Some plants are operating with very thin stocks, but generation has not been impacted,” he said, adding that inventories are expected to improve over the next two weeks as the monsoon retreats from northern India.
No imported‑coal blending or gas‑based generation mandate
Historically, the government has required thermal plants to blend 4‑10 % imported coal during tight supply periods. This year, however, the ministry will **not** issue a new blending directive. Agarwal explained that the focus is on “augmenting domestic coal production and improving logistics,” and that reliance on imported coal is being deliberately limited.
A similar stance applies to gas‑fired plants. With gas priced around **$28 per MMBtu** (≈₹25 per unit), the cost of gas‑based power is far higher than coal‑based power, which runs at roughly **₹3‑5 per unit**. Consequently, the government will not compel gas‑based generation despite the ongoing coal shortage.
Captive plants called to support the grid
To further cushion the supply gap, the ministry has, for the first time, directed **captive power plants**—industrial generators that primarily serve their own facilities—to offer any surplus electricity to the open market. India’s captive capacity stands at about **35,000 MW**, and the move aims to make additional power available without increasing reliance on imported fuels.
Production and supply trends
Coal India Ltd (CIL) saw a **5.7 % YoY decline** in August output (47.5 MT) due to the rains, but production rebounded **9.2 % YoY** in September to 53.5 MT. More importantly, CIL’s coal deliveries to the power sector rose **10.6 % YoY** to 48.9 MT by the end of September, suggesting that the bottleneck lies in moving coal to plants rather than in overall availability.
Outlook
Agarwal expects the situation to improve as the monsoon withdraws from the north and demand eases in the south, a region that does not produce coal. He anticipates a gradual rebuilding of stocks ahead of the upcoming **Durga Puja** festival.
What to watch
- **Coal stock levels** over the next fortnight, especially in plants classified as “critical‑stock” (below 25 % of normative requirement). - **Government communications** on any future blending or gas‑generation directives, particularly if monsoon‑related disruptions re‑emerge. - **Utilisation of captive generation** and the volume of surplus power sold to the grid, which could become a regular tool for managing supply shocks.
--- *All figures are drawn from statements made by Power Secretary Pankaj Agarwal to Moneycontrol and publicly released production data from Coal India Ltd.*