The government is likely to make available 50 million tonnes (MT) of coal stocks at thermal power plants (TPPs) end by April 1, 2025, as it prepares to meet the country’s power demand, which is growing annually at roughly 6-7 per cent.

Sources said the plan is to have 50 MT at the start of the next financial year and efforts are underway. “There won’t be an issue with stocks as production has also increased and Railways is also geared up for transporting the fuel,” said one of the sources.

The daily average requirement of coal at TPPs is around 2.67-2.75 MT. In comparison, stocks of the critical commodity at TPP end on April 1, 2023 stood at around 34.57 MT, and 47.34 MT on April 1, 2024.

The higher quantum is being arranged as the country’s power demand, particularly during the peak summer season (April-June), is breaking all past records.

For instance, during May 2024, India recorded an all time high peak demand of 250 gigawatts (GW) against the government’s projection of 235 GW. The projection for June was 240 GW, but the demand went up to over 245 GW.

2024 has been an exceptional year in terms of weather-related energy consumption. April-June was marked by sweltering temperatures coupled with intense heat waves across north India leading to a higher requirement for cooling.

According to India Ratings and Research (Ind-Ra), extreme weather conditions during H1 FY25 led to volatility in energy demand in Q1 FY25 (up 10.9 per cent Y-o-Y) and Q2 FY25 (up nearly 0.1 per cent Y-o-Y).

This has also prompted the Power Ministry to revise the peak power demand of the world’s third largest energy consumer upwards to 458 GW by 2032 from the earlier estimate of 384 GW.

As per the 20th Electric Power Survey report, the peak electricity demand is expected to reach 296 GW by FY27.

JM Financial in a report said that demand for power grew at an unprecedented rate in recent years. Energy demand grew at 8.4 per cent Y-o-Y during FY21-FY24 against 5 per cent Y-o-Y during FY09-FY19, while peak demand rose at 8.3 per cent Y-o-Y during FY21-FY24 against 6 per cent Y-o-Y during FY09-FY19.

Higher production

With reforms in the coal sector, private companies are now emerging as major producers. From a production of 90.56 MT in FY22, captive coal mines have produced 154 MT in FY24.

Mining behemoth Coal India’s (CIL) production is also poised to grow from 600 MT in FY22 to 1 billion tonnes (MT) by FY26.

Around 157 coal mines have been successfully allocated since 2015 under transparent commercial coal mine auction, holding Investors’ Conclave in different parts of the country.

There has also been a continuous increase in overall demand for coal over the years. Consumption/ actual supply of coal (including import) increased from 1,FY23. The demand for coal for FY24 was estimated to be 1,196.60 MT, against which actual supply was 1233.86 MT (provisional).

The total demand for coal, including coking coal and imports, stood at 1,027.84 MT in FY22, 1,115.04 MT in FY23 and 1,233.86 MT in FY24. Against this, pan-India production stood at 778.21 MT in FY22, 893.19 MT in FY23 and 997.83 MT in FY24.