With day temperatures across India set to rise by 2-5 degrees Celsius over the next three to four days, coal-fired power plants will be key to meet the summer demand, which may surpass the 2024 high to hit 270 gigawatts (GW), the Ministry of Power has said.
The country is bracing for a hotter-than-usual summer this season, with the India Meteorological Department (IMD) predicting above-normal temperatures and more heatwave days, particularly in North India. In light of the forecast, Centre has increased its projected peak power demand by 20 GW from the high of 250 GW seen on May 30 last year.
The month of May would be ‘the most critical’ this year as well, according to Grid India, which is preparing to guard against heightened system vulnerabilities triggered by peak demands and variation in renewable power generation.
Even though renewable energy now accounts for 46 percent of India’s total electricity capacity, coal would remain the mainstay in meeting this peak load. “We are expecting thermal (coal-fired) power to account for 70-74 percent in meeting the country’s peak demand this year. The share of renewable energy, which usually accounts for 11-14 percent will increase marginally by 2-3 percent. The contribution of hydropower is going to remain the same ranging from 7-11 percent,” Central Electricity Authority (CEA) chairperson Ghanshyam Prasad told Moneycontrol.
CEA, a statutory body under the Ministry of Power, is responsible for technical coordination and supervision of the power sector.
Record High Coal Stocks
Coal stocks at domestic thermal power plants (TPPs) – a key indicator proportionate to India’s potential to generate electricity - is currently at a historic high of 54 million tonne (MT), according to Power Ministry data.
Of the total 172 domestic, coal-based thermal power plants in India, only 12 had critical stocks as on March 24, which is considered to be a manageable situation. Coal stock is said to be at a critical level when power plants have less than 25 percent of the normative 26 days’ worth of fuel supply with them.
Coal stocks at TPPs have been under the spotlight after an episode of crisis that occurred over three years ago. In October 2021, India faced a severe, three-month long coal shortage, leading to power cuts and disruptions, as thermal power plants struggled to maintain adequate stock. Since then, the ministries of power, coal and railways have constituted a sub-group that meets twice a week to coordinate on coal production and logistics for power generation.
“For FY26, the Power Ministry has communicated their demand with us which is 906 MT. Accordingly, we will be distributing it (target) amongst our three major coal-producing sources - Coal India, captive and commercial mines and Singareni Collieries Company. The stated demand will be met by the Coal Ministry,” said a senior official from the Ministry of Coal.
India has produced a record one billion tonne of coal so far during FY25, compared to last fiscal's 997.83 million tonne (MT).
Rising Night-time Demand
The nation has been seeing an increasing peak power demand during the night or evening periods, considered as non-solar hours, and this remains a concern for the government.
The trend emerged in 2023, when the peak demand almost neared the day time demand, with all the load falling on coal-fired power generation. “During the day, we have more than enough power available since solar generation helps meet at least 50,000 MW (50 GW) of power demand, or even more. So, meeting the peak demand is not an issue. The problem is that the night-time peak demand is also touching almost similar levels since the summer of 2023,” said a senior ministry official.
During night time, electricity from solar power is zero, which puts all the load on thermal power capacity. In order to meet the night time demand, Centre has now started relying on 10-12 GW of gas-based power as well.
Section 11 to be Imposed if Necessary
Power Secretary Pankaj Agarwal said that the government is not ruling out imposing Section 11 of the Electricity Act, 2003 for imported coal and gas-based power plants to mandatorily run on full-capacity during the crunch, if the situation demands.
“As of now we have not ordered it. But if there is any crunch projected in meeting the peak demand, we would impose if the situation demands,” he said.
The Centre is also unlikely to make it mandatory for thermal power plants to blend imported coal for electricity generation this summer, when demand tends to spike, unlike the previous few years.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
