India has imposed emergency directives to maximise coal utilisation and maintain electricity supply amid critically low stockpiles and reduced hydropower output, highlighting mounting supply challenges in the country’s power sector.
India’s power sector is drawing down coal stockpiles at a fast pace as utilities push generation higher to make up for weaker hydropower output and the steep drop in solar supplies after sunset. The power ministry has now ordered captive coal-fired plants with capacity above 50 megawatts to run at full output and sell any surplus power on exchanges, a move that affects industrial generators in steel, fertiliser, oil refining and cement. According to the ministry, the instruction is needed because “it is imperative that entire capacity of all the sources of generating electricity, including the captive generating plants, are utilized to the maximum possible”.
The directive also extends to Tata Power’s 4-gigawatt Mundra plant in Gujarat, which has been told to remain at full capacity through December. Reuters reported that the government has used Section 11 of the Electricity Act, an emergency provision that allows it to order stations to keep running in extraordinary circumstances such as natural calamities. The latest measures reflect how narrow the country’s supply margin has become, even though captive plants account for only a small share of total coal generation compared with independent producers, which provide about 70% of India’s electricity.
Coal inventories at grid-connected power stations have fallen to the lowest level in almost three years, with stocks more than halved from a year earlier, according to the reports cited by Bloomberg and Business Standard. S&P Global said in August that thermal plants held about 34.5 million metric tonnes of coal, enough for only 11 days of burn, down from 49.15 million metric tonnes at the start of June and below the 17 days of cover seen a year earlier. It added that the number of plants with “critical” coal stocks had more than doubled, underlining the strain on the system despite policy steps meant to improve domestic coal access.
The pressure on inventories has been intensified by a difficult monsoon season and by India’s growing reliance on coal to balance the grid in the evening, when solar output fades. The country is on track for its driest monsoon in 17 years, although recent rains have narrowed the rainfall deficit to 13% from 15% earlier in the week, according to the reports. Heavy downpours have also flooded mines and disrupted transport in coal-producing Chhattisgarh, Odisha and Jharkhand, complicating deliveries to power plants. While cooler weather has eased peak demand and cut shortfalls over the past week, the broader fuel picture remains tight as the system absorbs weak hydro output, high cooling demand and a stubborn gap between supply and evening consumption.
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