Trains increase coal freight capacity; power units stock up before summer

Sector experts point that demand would be met on the back of thermal power yet again

After breaking all records for hot weather and high power demand in 2024, both metrics are set to rise even further this summer. As the entire country braces for extreme heat, power demand is expected to reach 270 gigawatt, a historic high.

 

Sector experts point out that demand will once again be met primarily by thermal power. Despite a major increase in renewable energy capacity, the lion’s share of electricity supply remains coal-based.

 

To ensure sufficient supply, a coal stock of 50 million tonne (mt) has been built up at thermal power plants (TPPs). For the next financial year (2025-26), coal demand is projected to reach 906 mt, Minister of Coal and Mines G Kishan Reddy said last month.

 

“As of January 24, TPPs had surpassed 47 mt of coal stock. Today, we have over 51 mt of coal available at TPPs. With a contingency plan in place, we are well-prepared for the upcoming summer,” a coal ministry official told Business Standard.

 

Sector experts note that while the northern region has traditionally driven power demand during summer months, recent years have brought unpredictable shifts. “While northern states remain the bulk demand drivers, heatwaves in the eastern region and massive industrial demand from the south are pushing overall consumption higher. This is now a key factor in supply planning,” an executive observed.

 

The Ministry of Power has advised hydropower projects to conserve water for peak demand months and directed coal-fired units to operate at optimal levels. Gas-based plants will again run under a special scheme, as in previous years. 

 

“Renewables are expected to contribute, but thermal power will bear the bulk of the load,” an official said.

 

To ensure efficient coal transportation, the railways is working to prevent supply disruptions during peak demand season. “Discussions are ongoing with the Ministry of Coal and TPPs to front-load their stocks, ensuring that even regular supply during peak season can be managed due to higher availability at plants from the outset,” a senior railway official said.

 

He added that 90 per cent of TPPs serviced by the railways have agreed to this plan, while talks continue between the Ministries of Railways, Power, and Coal to secure compliance from the remaining 10 per cent.

 

The ₹51,000 crore Eastern Dedicated Freight Corridor (DFC), stretching from Punjab to Bihar, proved to be a game-changer for coal transportation last year, preventing a repeat of 2022, when the railways had to cancel over 1,100 passenger trains to avert a nationwide coal crisis.

 

“A lot of internal capacity-building work was done over the past few months due to the Kumbh Mela, which stretched passenger track capacity. As a result, nearly all freight movement through the region shifted to the eastern corridor. We have since optimised processes to handle even more coal traffic if needed,” a senior executive at the Dedicated Freight Corridor Corporation of India (DFCCIL) said.

 

At this time of year, the eastern corridor typically moves 65–70 rakes of coal per day. This can be increased with long-haul trains, which can effectively double the volume transported. One rake of coal consists of 59 wagons, and 10 rakes can generate 1,800 megawatt of electricity for power plants.

 

In June last year, DFCCIL ran 15–20 long-haul trains daily to supply coal to roughly 20 power plants along the Eastern DFC.

 

The ministry has set a target of transporting 656 mt of thermal coal in 2025-26, a 2.3 per cent increase over the Revised Estimates for 2024-25 (FY25) presented in the February Budget.

 

Meanwhile, coastal shipping and inland waterways are emerging as additional modes for transporting thermal coal, particularly in southern states.

 

“More coastal shipping would be beneficial, but the rail-sea-rail route is expensive for some states. The capacity exists at ports, but implementation depends on state governments and distribution companies,” a senior government official said.

 

A senior official from the Inland Waterways Authority of India added that while waterways could be used to transport more coal, no concrete policy action has been taken in that direction so far.

 

Coal accounts for 21 per cent of the 120 mt of cargo ferried via national waterways in FY25. 

Bracing for heat wave  > Coal demand projected to hit 906 mt in FY26

> Thermal power plants hold 50 mt in reserves

> Railways targets 656 mt of thermal coal transport in FY26

> 90% of railway-serviced thermal plants to front-load stocks for peak season

> February 2025 was India’s hottest February since 1901