September 29, 2026 - Even as rainfall in some parts of the country eased the pressure on electricity demand recently, coal stocks at domestic coal-based power plants have continued to slide, dipping by nearly 24% from the level recorded at the beginning of September.

The depletion in coal stocks comes amid an unusual surge in electricity demand this September, and greater reliance on coal-based generation as hydropower output has declined due to deficient rainfall and El Niño-influenced weather conditions. Peak power demand has also remained close to the levels seen during the summer peak, touching 269 gigawatts (GW) on September 10 — the highest ever recorded for September and just 1 GW below the year’s peak of 270 GW seen in May.

As of September 27, coal stocks at domestic coal-based power plants stood at 19.2 million tonnes (mt), 64% below the required stock of 53.7 mt. The stock was at 25.4 mt on September 1, when it was 52.5% below the required stock of 53.5 mt.

Coal stocks have declined by more than half compared with the year-ago period. On September 27 last year, coal stocks at domestic coal-based power plants stood at 43.1 mt, meaning stocks this year were down by about 55.5%.

At least 72 of the 168 domestic coal-based power plants were also at critical fuel-stock levels. This means that their coal stock was below 25% of the normative stock — the quantity that thermal power plants are required to maintain to ensure adequate fuel availability for uninterrupted generation.

Stress on coal-based generators

The situation has also led the Centre to invoke emergency measures last week to ramp up coal-based generation. Under Section 11 of the Electricity Act, which allows the government to mandate power generation in extraordinary circumstances, the government asked about 112 captive coal-fired power plants to operate at maximum capacity from October 1 till December 31.

A captive power plant is a dedicated power-generation facility which is built and operated by an industrial company or a group of factories to supply electricity for their own use, rather than selling power to the public grid.

Such emergency provisions had been previously invoked for imported coal-based power plants, which have around 18 GW of installed capacity but often remain underutilised because generation from these plants is more expensive than that from domestic coal-based plants.

However, this year’s unusual surge in power demand, coupled with subdued generation from hydropower constrained the availability of alternative generation capacity, placing an incremental burden on thermal plants to meet the evening shortfall.

From September 1 to September 26, generation from coal-based sources rose by 15.5% to 96,718.83 million units (MU) from 83,736.47 MU during the same period last year. Since April, coal-based generation in 2026 stood at 676,633.25 MU, a surge of 10.7% from 611,331.53 MU in the corresponding period of 2025.

In contrast, hydropower generation fell by 15.5% to 16,483.18 MU during September 1 and September 26, from 19,505.93 MU in the corresponding period of 2025.

Tightening fuel position

Ankit Jain, Vice President and Co-Group Head, Corporate Ratings, ICRA Ltd, told The Indian Express that monsoon-related disruptions had affected domestic coal supply, impacting mining and evacuation activities during the period.

“While overall mining output was lower, the coal supply to the power sector witnessed some increase. Lower coal availability owing to monsoons and elevated Plant Load Factor (PLF) for thermal power stations led to pressure on coal inventory levels at several power plants, with inventory falling critically below the normative levels,” he said, adding that it was in response to this tightening fuel position the government invoked the Section 11 to safeguard the reliability of power supply.

Alekhya Dutta, Director, Electricity and Renewables Division, TERI said the invocation of Section 11 should be seen as a step to mitigate potential supply shortages and preserve system reliability.

“There are signs of a tighter supply environment that warrant proactive management of available thermal capacity. Peak demand has remained elevated, reaching around 270 GW, while coal stocks at a number of thermal plants have come under pressure. Against this backdrop, the extension of Section 11 to captive plants provides an additional buffer by bringing available generation into the market, particularly during periods when demand is high and renewable generation is lower,” he added.

Power sector experts expect the pressure on coal-based power plants to ease in the coming weeks as rainfall improves in several parts of the country. The India Meteorological Department has forecast heavy rainfall at isolated places in several parts of the country in the coming days, which could help in easing cooling demand. However, excessive rainfall may continue to disrupt mining and coal evacuation in some areas.