A hot, dry El Niño year has pushed India’s electricity demand 45 to 50 gigawatts above last year’s levels while cutting hydropower output by a fifth. The result, according to Central Electricity Authority data analysed by Reuters, is that 96 of the country’s 191 coal-fired plants held critically low stocks on 19 October. The squeeze exposes a gap in India’s clean-energy build-out: storage.
India’s coal-fired power stations are being asked to do more with less. Central Electricity Authority (CEA) data cited by Reuters on 21 October show that 96 of 191 coal plants were operating with less than three days of fuel on 19 October, up from 60 in mid-September. Total coal stocks at power stations have fallen by about 5% since the start of October.
The shortfall is not for want of effort by the supply chain. The Ministry of Coal said last week that it had increased dispatches to power plants. But demand has outrun deliveries.
Why demand has surged
According to Reuters, daily peak electricity demand this year has been running about 45 to 50 GW higher than a year earlier. The weather explains much of it. India is in an El Niño year, which typically brings a weaker monsoon and hotter conditions; air-conditioning and irrigation pumping both push consumption up when rain fails.
The same weather has reduced the supply of the country’s most flexible clean power. CEA data show hydropower generation fell 20% year on year in September, as reservoirs that would normally be full after the monsoon held less water. Coal-fired generation rose 13.3% over the same period to fill the gap.
Even so, supply fell short. In September the gap between electricity demand and supply rose to 560 million kilowatt-hours, the highest since August 2023, according to Reuters.
What “critical” means
Power plants are expected to hold a buffer of coal so that a disruption in rail deliveries or a surge in demand does not force them to cut output. A plant with less than three days of fuel has little margin for error. If deliveries slip, operators must ration generation, buy more expensive imported coal or power on exchanges, or ask for priority rakes from Coal India and the railways. Distribution companies, in turn, may resort to scheduled load-shedding, which tends to fall first on rural feeders and agricultural connections.
Shortages of this kind are not new. India faced a similar crunch in October 2021, when post-pandemic demand recovery and heavy rain in mining areas left many plants with only a few days of coal, and again in the heatwave of April–May 2022. Each episode prompted measures to raise domestic production and stockpiles, and India’s coal output has grown substantially since. The current squeeze suggests that output growth alone cannot absorb a demand shock of this size when hydropower falters at the same time.
The storage gap
The paradox of India’s position is that non-fossil sources now make up a large share of its power system. Reuters reports that nearly 55% of India’s power generation comes from non-fossil sources; NSH notes that this figure appears to describe installed capacity rather than actual generation, since coal still supplies the large majority of electricity consumed in India. The distinction matters. Solar plants produce abundantly at midday but nothing after sunset, when demand from homes peaks. Without large-scale batteries or pumped-storage hydro to shift solar output into the evening, coal plants remain the backstop.
Reuters attributes the continuing dependence on coal during high-demand periods to exactly this lack of storage. India has tendered battery-storage and pumped-storage projects in recent years, but commissioned capacity remains small relative to the evening peak. Weak hydro output this year has removed part of the flexibility that dams normally provide.
A Telangana example
The pressure is visible locally. a local news paper reported late on 21 October that the fifth and final 800 MW unit of the 4,000 MW Yadadri thermal power station in Nalgonda district has been synchronised with the grid. The same report says Coal India has agreed in principle to supply 50 lakh tonnes a year from Mahanadi Coalfields, but the formal agreement is pending, and the plant’s stock is reportedly about five days.
New capacity is useful only if it can be fuelled. Yadadri’s completion adds generating capability to a state facing a dry year, low hydro output from the Krishna basin and high agricultural pumping demand, but its contribution in the coming months will depend on coal logistics as much as on its turbines.
What could ease the squeeze
Several factors could relieve the pressure over the coming weeks:
- Cooler weather. Demand usually falls in November as temperatures drop, though rabi-season irrigation adds load in agricultural states.
- Rail logistics. Coal India and Indian Railways can prioritise rakes to the most critical plants, as they did in 2021 and 2022.
- Imports and blending. The government has previously directed coastal and import-based plants to run at full capacity and allowed blending of imported coal, at higher cost. Brent crude above $110 a barrel, reported on 21 October, suggests energy import bills are already elevated.
- Northeast monsoon rain. Rain over southern India could modestly raise hydro output and reduce pumping demand.
None of these addresses the structural issue, which is the need for storage and grid flexibility so that a dry year does not automatically become a coal-supply emergency.
Uncertainties
The figures are drawn from CEA data as analysed by Reuters; NSH has not seen the CEA’s daily coal-stock report for 19 October directly, and the Ministry of Power had not issued a public response in the material NSH reviewed. Whether the shortfall leads to widespread outages will depend on the weather and on how quickly stocks are rebuilt.
