The demand for thermal power has outpaced demand projections and coal production.

According to the National Power Portal, 121 out of 123 power plants have less than five days of coal stock.

This is worse than the situation a month ago when 76 out of 121 thermal plants had less than seven days of coal stock. The low coal stock position can be attributed to a higher-than-expected power generation. India’s cumulative power generation from April 1 to October 15 stood 4 billion units higher than program (planned) generation at 687 billion units.

“Coal production has not been able to keep pace with the spike in power demand. In the current financial year till October 15, there has been a 7 per cent annual growth in power generation. But the growth in thermal power generation has been just 4.64 per cent due to lower coal availability,” a power sector official told BusinessLine .

Demand for coal

“The higher demand for coal comes predominantly from industrial growth in Uttar Pradesh and Bihar. In Gujarat alone, there has been a demand spike of 20 million units in the last 2.5 years alone. There is also a strong demand coming from Maharashtra and the southern States,” the official said. “In October alone, the total power generation is up 12.59 per cent, but thermal generation is up by just 9.7 per cent. The difference is met by production from gas-based power plants and renewable energy,” he added.

The higher demand is putting more pressure on the coal supply value chain. Former Secretary in the Ministry of Coal, Susheel Kumar, said, “There are two aspects to the coal supply situation. One is production, and the other is supply, and both cannot be ramped up to keep pace with the spurt in demand. The level of demand for thermal power that is being witnessed is unprecedented.”