Coal stocks at India’s thermal power plants declined by nearly 42 per cent year-on-year to 29 million tonnes in August 2026, down from 50 million tonnes a year earlier, according to a recent Crisil report. The decline reduced the average fuel cover at power stations to around nine days, the lowest level recorded in 34 months.
The drop in inventories came as coal-fired power generation increased by 13 per cent amid rising electricity demand. Overall power demand grew 9.5 per cent between April and August, driven by a hot summer and uneven monsoon conditions.
Rainfall between June and August was 13 per cent below the long period average, adding to electricity demand while also affecting coal transportation from mining regions.
Renewable power generation increased by 20.7 per cent during the period. However, because renewable generation is intermittent, coal fired plants continued to meet a large share of baseload electricity demand.
Domestic thermal power plants consumed around 395 million tonnes of coal during the first five months of the fiscal year, an 8 per cent increase from the same period a year earlier.
The decline in coal inventories also increased the number of thermal power stations with critically low stocks. In August, 51 of 190 thermal power plants had critically depleted inventories, compared with 20 plants a year earlier.
Under Central Electricity Authority norms, coal stocks are considered critical when they fall 25 per cent below prescribed normative levels. The situation was particularly pronounced in Rajasthan, Madhya Pradesh and Andhra Pradesh, where 72 per cent, 69 per cent and 60 per cent of coal-based capacity, respectively fell into the critical category.
Coal stocks were relatively stronger in states located closer to major mining areas. Critical capacity stood at around 6 per cent in West Bengal and 10 per cent in Odisha.
According to Crisil, the decline in power plant inventories was mainly linked to transportation bottlenecks rather than an underlying shortage of coal. Heavy monsoon rainfall in the eastern mining belt disrupted coal evacuation and transportation from mines to power stations.
Crisil Intelligence Director Sehul Bhatt said pithead coal inventories had fallen from a peak of 157 million tonnes in early March 2026 to 76 million tonnes in August as previously high stocks normalised. The August level was broadly in line with the average of 76.1 million tonnes recorded during August 2024 and 2025.
Coal India has allowed power plants operating under fuel supply agreements to lift additional coal supplies by road from September 7 to help address transportation constraints.
Crisil Intelligence Associate Director Surbhi Kaushal said the recent decline in power plant stocks appeared to be a temporary logistical issue rather than evidence of a structural coal supply constraint.
Crisil expects electricity demand and coal dispatches to grow by 6-7 per cent during the second half of the fiscal year, keeping coal transportation and inventory management important for India’s thermal power sector.