Regional Coal: India targets 50MT of coal stock to meet surging power demand

The Indian government aims to secure 50 million tonnes (mt) of coal stock at thermal power plants (TPPs) by April 1, 2025, as part of its strategy to address the country’s rapidly growing power demand. According to Indian media reports last week, the initiative marks a significant increase in preparedness compared to previous years, when stocks stood at 34.57 mt in 2023 and 47.34 mt in 2024.

A government source noted that the target is achievable due to increased coal production and enhanced logistical capabilities of Indian Railways. “There won’t be an issue with stocks as production has risen, and the Railways is also geared up for transporting the fuel,” said the source.

The daily coal requirement at TPPs is estimated at 2.67–2.75 mt, and the government is focused on ensuring sufficient supplies during the peak summer season when power demand typically surges. In May 2024, India recorded an all-time high power demand of 250 GW, exceeding the government’s projection of 235 GW. Similarly, June 2024 saw peak demand rise above 245 GW, surpassing the earlier forecast of 240 GW.

This growing demand has prompted the Power Ministry to revise its long-term estimates, projecting peak power demand to reach 458 GW by 2032, up from the earlier estimate of 384 GW. According to the 20th Electric Power Survey report, peak electricity demand is expected to touch 296 GW by FY27, reflecting the urgency for a reliable coal supply chain.

Read also: India coal output rises 6% in H1 FY2025

India Ratings and Research (IndRa) attributed the increased power demand to extreme weather conditions and heightened economic activity. During the first half of FY25, energy demand rose by 10.9% year-on-year in Q1 and 0.1% in Q2, highlighting seasonal volatility in electricity consumption patterns.

To meet this growing demand, the government has accelerated coal sector reforms, with captive coal mine production rising from 90.56 mt in FY22 to 154 mt in FY24. Additionally, Coal India Limited, the largest producer, aims to increase production from 600 mt in FY22 to 1 billion tonnes by FY26.

Since 2015, 157 coal mines have been successfully auctioned under a transparent allocation system, bolstering private sector participation and enhancing overall coal availability. Pan-India coal production has also seen significant growth, reaching 997.83 mt in FY24 from 778.21 mt in FY22.

Editing by Alexander Ginting