Coal demand in India is set to rise sharply due to dwindling inventories at coal-fired power plants. According to recent data, the share of coal-fired power plants operating with very low coal inventories has increased to nearly 40%. This situation has been particularly evident in recent weeks.
Power Plant Inventory Status
According to published information, as of the end of last week, 74 coal-fired power plants in India had less than three days of coal inventory, which shows a significant increase compared to the previous week when there were 60 plants. This inventory decline has occurred while electricity demand in India has risen due to weather conditions and rising temperatures.
Challenges in Coal Transportation and Supply
Despite this inventory decline, India is not facing a serious problem in coal supply. The Ministry of Coal of India has stated that domestic coal companies are increasing supply to power plants. At the same time, monsoon rains in August have negatively impacted coal transportation and limited access to coal from coal-producing states.
Despite these challenges, coal remains the largest source of electricity generation in India, and with rising demand, total coal demand is expected to increase to 1.353 billion tons this year. This represents a 4.2% increase compared to last year, indicating a return to previous demand levels.
Analysts believe that despite the significant inventory decline, overall access to coal remains sufficient, and the key challenges in recent weeks have been related to domestic transportation. The Ministry of Coal of India has also announced that the number of thermal power plants with inventories below 25% of normal needs is being closely monitored, and measures to supply coal to mitigate these issues are being implemented.
