This, coupled with the ongoing record-high power demand, has led experts to caution that the coal sector’s ability to meet a sharp surge in electricity requirements could become questionable.
“The immediate challenge is to ensure that coal supplies keep pace with the sharp rise in electricity demand. While increased dispatches are encouraging, persistently low inventories at several power plants leave limited operational buffers and constrain planned maintenance,” said Vikas Gaba, partner and national head – power & utilities at KPMG India.
Coal stocks at plants stood at around six days as of October 10, 2026, lower than the levels observed in the last three years, according to a recent ICRA analysis. Coal stocks continue to remain below the normative requirement of around 19-20 days, with lower inventory levels providing a relatively thinner buffer against demand and supply disruptions, said Ankit Jain, vice-president and co-group head – corporate ratings, ICRA.
According to the latest data sourced from the Central Electricity Authority (CEA), 98 plants had critically low stocks on October 23, with total stocks at 19.7 million tonnes (mt). This was down 8 per cent from 21.24 mt in September 2026. At present, the stocks are sufficient for just 6.3 days. This is only about 32 per cent of the normative stock requirement.
Domestic coal production declined by 3.2 per cent year-on-year (Y-o-Y) in the first five months of FY27, largely due to lower output from Coal India Limited, but coal supply to the power sector increased by 4 per cent during the period, Jain said. “A further decline in stock levels, particularly if accompanied by weaker coal production or supply constraints, may limit the sector’s ability to meet any sharp surge in peak demand,” he added.
Earlier this month, the coal ministry said that coal stocks at domestic power plants had remained stable above 18 mt. It added that supplies to plants with critical stocks were being closely monitored, with requirement-based redistribution of coal to vulnerable stations to ensure adequate supplies and uninterrupted power generation.
The ministry, in another statement, also said that stock depletion had slowed sharply, with the daily drawdown falling by more than half from 0.243 mt per day in September to 0.116 mt per day in October. While the position was stabilising, stock rebuilding was yet to commence, the ministry had said.
It further said that the “critical stock” tag is a norm-based trigger and is designed to flag plants early, well before an actual fuel shortage or generation loss occurs. It is not an indication that a plant has run out of coal or is at imminent risk of shutting down, the ministry added.
In a significant indication of the stress, a Gujarat power utility recently asked industrial consumers to cut electricity use during evening hours to avoid shortages, according to media reports. The state recorded its highest-ever electricity demand of 29,822 megawatts (MW) on October 16, 2026, which was 36.6 per cent higher than the 21,822 MW recorded in October last year, according to a statement by the Gujarat Chief Minister’s Office (CMO) last week.
The statement further mentioned that the state was ramping up coal supplies, with the Centre assuring 10-11 railway rakes of coal daily until November and 13-14 rakes thereafter. The state has secured additional power allocations from central generating stations and extended existing arrangements for 716 MW until March 2028, while seeking another 500 MW. It also plans to maximise the use of around 12,000 MW of daytime solar generation by shifting agricultural consumption to solar hours and expanding battery energy storage capacity.
Data from Grid Controller of India Limited (GCIL) indicates that India’s electricity demand registered Y-o-Y growth of 23.4 per cent during the first 10 days of October 2026. Supported by higher-than-normal temperatures, sustained cooling requirements and healthy industrial activity, electricity demand remained resilient despite the end of the peak summer season, according to Jain.
“The focus must be on sustained, reliable coal movement and rebuilding adequate stocks at individual stations to safeguard generation reliability, particularly if demand remains elevated,” said Gaba. Power ministry data showed the gap between India’s power demand and supply stood at 75 MW on October 24.
