India’s Thermal Coal Stocks Fall 42% To 29 MT In August, Cover Drops To 9 Days: Crisil

New Delhi, Sep 19 (KNN) Coal inventories at India’s thermal power plants fell nearly 42 per cent year-on-year to 29 million tonnes in August 2026 from 50 million tonnes a year earlier, reducing fuel cover to just nine days, according to Crisil.

The stock cover was the lowest in 34 months since November 2023, as coal-fired power generation rose 13 per cent amid strong electricity demand.

Demand Surge Drains Coal Stocks

Electricity demand increased 9.5 per cent during April-August, driven by a hot summer and an erratic southwest monsoon, with cumulative rainfall during June-August 13 per cent below the long-period average, reported Economic Times.

Although renewable generation grew 20.7 per cent, its intermittent nature meant coal-based plants continued to meet a large share of baseload demand. Thermal plants consumed 395 million tonnes of coal during the five-month period, up 8 per cent from a year earlier.

The drawdown pushed 51 of 190 thermal power stations into the critical stock zone in August, compared with 20 a year earlier. Under Central Electricity Authority norms, stocks are considered critical when they fall 25 per cent below normative levels.

Northern, Southern Grids Face Higher Stress

The impact was particularly pronounced in inland northern and southern states, with 72 per cent of coal-based capacity in Rajasthan, 69 per cent in Madhya Pradesh and 60 per cent in Andhra Pradesh entering the critical zone.

Pithead states such as West Bengal and Odisha were better placed, with only 6 per cent and 10 per cent of coal capacity, respectively, in the critical category.

Logistics Bottlenecks Behind Stock Decline

Crisil said the decline reflects transportation bottlenecks rather than an underlying shortage of coal, with extended monsoon showers in the eastern mining belt disrupting coal evacuation.

Sehul Bhatt, Director at Crisil Intelligence, said pithead inventories fell from a peak of 157 MT in early March to 76 MT in August as elevated stocks normalised. He noted that August inventory levels remained broadly in line with the 76.1 MT average recorded in August 2024 and 2025.

Coal India has allowed plants covered under fuel supply agreements to lift supplementary coal volumes by road from September 7.

Crisil Intelligence Associate Director Surbhi Kaushal said the decline in power plant stocks appeared to be a temporary logistical issue rather than a structural supply constraint. She expects electricity demand and dispatches to grow 6-7 per cent in the second half of the fiscal year.

(KNN Bureau)