India stocking up coal for high power demand, aims 50 mn tn inventory at plants by April

The opening stock for FY25 was 47.78 million tonne. The bid to increase in coal stocks comes on the back of expectations that peak electricity demand may surpass the record 250 GW met on 30 May 2024, which made the government look at coal to meet the growing demand.

The government has targeted to cross 1 billion tonne coal production for the first time in FY25.

"For the next year (FY25), the plan is to have 50 million tonne at the start of the fiscal. Efforts are underway with increased production and the ministry is confident that the target would be met," said one of the people mentioned above. 

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With an average requirement of 2.72 million tonnes per day, the 50 million tonne stock would be adequate to operate the plants for around 18 days.

Currently, the stock of coal domestic coal based thermal power plants stands at 37.61 million tonnes. India has 167 domestic coal-based plants with a total power generation capacity of 193 GW.

The ministry's efforts to increase inventory and remain prepared for a likely higher demand comes in the backdrop of the crisis-like situations experience in FY22, when stocks of domestic coal were not adequate to meet the post-Covid pent-up power demand and power plants were reluctant to purchase imported coal at high prices.

The Parliament's standing committee on coal, mines and steel also noted that in FY22 the coal stock at thermal power plants fell to a low of 7.2 million tonnes, enough for only four days of coal requirements.

In its latest report submitted in the parliament earlier this month, the panel also noted that the stocks improved to 30.54 million tonnes in 2023-24, adequate for meeting 13 days of operations at power plants.

According to the 20th Electric Power Survey the peak electricity demand on all-India may touch 277.2 GW in the year 2026-27 respectively and 366.4 GW by the end of the financial year 2031-32. For the past three years, the peak power demand in the country has been touching new record levels, the latest being 250 GW on 30 May this year.

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Both the coal and power ministries have ramped up efforts to ensure availability of power in view of the surging power demand. Power ministry has already planned to add 80 GW of coal-based power capacity in the country by 2032, although the country has also has an ambitious energy transition plan to install 500 GW of non-fossil capacity by 2030.

Further, coal is expected to be the baseload for India's power sector for few years down the line as renewable energy being intermittent may destabilize the grid.

From FY20 to FY24, India's coal production increased at 8.07% per year from 731 million tonnes to 997 million tonnes. The ministry has a target of 1.5 million tonne annual production by FY30.

Queries mailed to the ministry of coal remained unanswered till press time.