Thermal Coal Stocks Fall 42%
Coal stock cover at India’s thermal power plants has dropped to nine days, the lowest level since November 2023, amid higher power demand.
Coal stocks at India’s thermal power plants fell 42% year-on-year to 29 million tonnes in August 2026, down from 50 million tonnes a year earlier, according to a Crisil Intelligence report. The decline reduced coal stock cover at power plants to nine days from 17 days a year ago, the lowest level since November 2023.
The fall in inventories came as coal-based power generation increased by about 13%, while electricity demand rose sharply. Between April and August, coal consumption by thermal power plants increased 8% year-on-year to 395 million tonnes, while power demand grew 9.5%.
Overall power generation increased nearly 10.5% during the April-August period. Renewable energy generation also grew 20.7%, but coal-fired generation continued to provide a major share of round-the-clock electricity because of limited energy-storage capacity.
The inventory pressure was particularly visible at thermal plants dependent on domestic coal. 51 of 190 thermal power plants were operating with critically low coal stocks in August, compared with 20 plants a year earlier. Rajasthan, Madhya Pradesh and Andhra Pradesh recorded particularly high levels of inventory stress.
Crisil said the decline does not currently indicate a structural shortage of coal. Pithead inventories stood at about 76 million tonnes in August, broadly in line with the average recorded during August 2024 and 2025.
The main challenge has been the gap between rising coal demand and transportation capacity. Prolonged rains in the eastern coal belt disrupted mining operations and coal evacuation. Between April and August, rake loading increased about 5%, while coal receipts at power plants rose only 3%, limiting inventory replenishment.
To ease the situation, Coal India allowed power plants with fuel supply agreements to lift additional coal by road alongside rail transport from September 7. Crisil expects electricity demand, coal-based generation, coal consumption and coal dispatches to grow by around 6–7% year-on-year in the second half of the fiscal year.