India Seeks to Triple Power Plant Coal Stocks to Avert Summer Outages

India is directing coal producers and railway officials to triple power plant coal stocks before next summer. According to Sina Finance, the Coal, Power and Railways ministries set a target of increasing inventories from about 18 million tonnes to at least 55 million tonnes by March, the end of the current fiscal year. Sources said the target is roughly equivalent to stock levels at the same time this year. Coal shortages in recent months have contributed to power cuts and higher energy costs. Weak hydropower output and heat-driven electricity demand have strained the grid, while Coal India’s priority supply to power plants has tightened fuel availability for factories. Stocks have slowly recovered over the past two weeks as temperatures eased, but they still cover only about six days of consumption, a five-year low. Disruptions such as Cyclone Anob last month have added to the challenge of preparing for summer. India generally requires power plants to hold about three weeks of coal, though standards vary; nearly half of plants have less than a quarter of their required reserves. The government aims to avoid power shortages ahead of elections in several key states in the first half of next year, including Uttar Pradesh. Coal India said its shipments hit a record last month, surpassing the previous March record, with more than 80% going to grid-connected power plants. Its October output was also the highest for that month. Indian Railways increased the number of rail cars deployed by 20% year over year in October, and the Power Ministry wants capacity to rise a further 7% by March. Improved supply and lower demand have helped stabilize electricity in states including Chhattisgarh, where industrial outages occurred last month, but power plants’ priority access has reduced supplies for other coal users. Rajiv Agarwal, secretary-general of the Association of Captive Power Producers of India, said contracted coal can take months to arrive, forcing companies to buy at high prices in spot auctions or purchase electricity from the grid. He said worsening smog in northern India could disrupt rail transport and tighten supplies further. Vijay Kumar, secretary-general of the Indian Newsprint Manufacturers Association, said coal supplies to newsprint producers had improved only slightly. He wrote to Prime Minister Narendra Modi last month asking him to intervene and reduce coal allocations to power plants.