Thin power buffer

The country needs a more flexible and resilient system

The sharp deterioration in coal stocks at thermal power plants is a warning that India’s power system has little buffer to absorb weather-related shocks. According to the recent Central Electricity Authority (CEA) data, the number of plants with critical coal stocks rose from 59 on September 9 to 74 on September 19. Plant-level coal stocks fell 7 per cent in a week, from 24.7 million tonnes (mt) to 22.9 mt, leaving inventories at only 39 per cent of the normative requirement. Stocks have fallen to levels that can support about seven days’ power generation, as against the normative 18 days. Further, at the same time last year, around 15 plants were in the critical category and stocks were around 50 mt, or 89 per cent of the normative requirement. The immediate pressure is coming from an unusual combination of demand and supply conditions. Electricity demand rose 17.6 per cent year-on-year in the first 13 days of September, after increasing 12.4 per cent in August. Peak demand touched 269 gigawatt (Gw) on September 10, close to the year’s peak of about 270 Gw recorded in May. Persistent heat has kept cooling demand high, while deficient rainfall has increased dependence on groundwater pumps for irrigation.

 

The supply side has simultaneously weakened.  Reduced rainfall has lowered reservoir levels and hydropower generation. Hydropower generation since April was 10.85 per cent lower than in the corresponding period of 2025, according to an analysis of the National Power Portal data. Coal-based generation, in contrast, rose 10.64 per cent over the same period, showing how thermal power has had to compensate for weaker hydro output. Coal availability is also under pressure. Domestic production declined 3.1 per cent, year-on-year, during the first four months of FY27, largely because of lower output from Coal India and captive mines during the monsoon. Besides, the availability of coal at the pithead does not necessarily translate into adequate stocks at power plants. Coal India continues to hold a stock cushion of 76 mt as of early September, but ensuring their timely movement to individual power stations, particularly during periods of high demand, remains critical.

 

The system has begun using more expensive alternatives. Gas-based generation rose 80.3 per cent during the first week of September from a year earlier, but higher gas prices make this an expensive fallback. The immediate priority should, therefore, be operational. Coal rakes need to be prioritised for plants with the lowest inventories, while mine-to-plant logistics on road and rail should be coordinated more tightly. Pre-monsoon stock-building also needs to become more systematic, with higher buffers at plants vulnerable to transport disruptions. Coal India’s rising dispatches as the monsoon eases provide some relief, but the CEA data suggests that rebuilding plant inventories will take time. In the longer term, India needs a power system designed with adequate flexibility. A faster deployment of storage, flexible gas capacity, and better hydro-reservoir management can reduce the need to stretch coal plants whenever weather disrupts. India cannot prevent a deficient monsoon or an unexpectedly hot September. It can, however, ensure that such events do not translate into thin coal inventories, expensive emergency purchases, and supply shortages.