October 8, 2026 - India’s power sector is facing a growing squeeze as near-record electricity demand pushes spot power prices sharply higher, even as coal stocks at thermal power plants fall to critically low levels. At the Indian Energy Exchange (IEX), the average day-ahead market clearing price rose to 7.3 Indian rupees a unit in September, up 105 percent year-on-year.

 

The number of power plants with coal stocks at critical levels rose to 90 as of Monday, the highest on record, according to the Central Electricity Authority. The country’s 190 thermal power plants held 20.5 million tonnes (mt) of coal, equivalent to just 33 percent of their normative stock requirement.

The pressure on supply comes as electricity consumption remains unusually strong. Peak demand reached 269 gigawatts (Gw) on September 10, while electricity traded on the IEX rose 10.4 percent year-on-year to 12.22 billion units (BU) during the month. National electricity consumption increased 11 percent to 162 BU.

The pressure is particularly acute at NTPC, India’s largest power generator. Coal stocks have fallen to 5.2 mt, enough to sustain operations for only seven days at most of its plants, down sharply from 18.7 mt in April, when stocks were sufficient for about 25 days. NTPC operates 50 power plants. 

“Right now, the coal situation is not good. All NTPC power plants are at a critical stage. NTPC has coal stocks for just seven days in most plants. If the situation does not improve, there could be a power shortage by February next year. It can only be salvaged through proper coordination among the different players,” said a senior executive, requesting anonymity.

The executive said NTPC’s captive coal production had increased 20 percent since April, while supplies from Coal India, the state-owned miner, had barely increased. Supplies from Coal India to NTPC in 2026-27 have so far remained at 2024-25 levels, he said.

However, the coal ministry, in a statement on Monday, noted that Coal India had stepped up supplies to power plants during the first three days of October, building on stronger dispatches in September. Daily power-sector dispatch reached 1.74 mt, 1.79 mt and 1.71 mt on September 28-30, before rising to 1.75 mt, 1.87 mt and 1.81 mt on October 1-3.

Coal India’s supplies to the power sector rose 10.6 percent year-on-year to 48.9 mt in September 2026, from 44.2 mt a year earlier, while its overall coal supplies increased 12.5 percent to 61.2 mt, according to the ministry.

The supply constraints have affected NTPC’s several pithead plants dependent on Northern Coalfields, a Coal India subsidiary. “Some of NTPC’s pithead plants that depend on Northern Coalfields for coal have had to be put on maintenance. In our pithead power stations in Vindhyachal, Singrauli, Sipat and Korba, there are problems,” said the executive cited above.

NTPC has begun diversifying its coal procurement, including purchases from commercial and captive miners. It is buying coal from Odisha, seeking supplies from state-owned NLC and has procured coal from captive mines in West Bengal, the executive said.

The company currently has about 50 mt of captive coal from its mines and is targeting an additional 10-15 mt from commercial mines in 2026-27. It has also written to the coal and power ministries flagging the supply shortfall, according to the executive.

In the second quarter of the current financial year, from July to September, electricity traded on IEX rose 12.7 percent year-on-year to 39.685 BU. The average day-ahead market clearing price increased 46 percent to 5.7 Indian rupees per unit, while the real-time market price rose 49 percent to 5.2 Indian rupees per unit.

National energy consumption during the quarter rose 11.5 percent year-on-year to 502 billion units, underscoring the strength of demand at a time when coal availability remains constrained.