- Coal stocks look sufficient overall but are critically low at key plants
- Rising demand may force urgent, expensive coal imports
India’s power sector is entering the summer months with a growing concern that is not yet fully visible in the market. Coal stocks at power plants are falling, and a large portion of capacity is already operating at critically low levels. If demand rises sharply with heat, the system could come under stress.
As of March 22, 2026, total coal stock at power plants stood at 58.17 million tonnes, down from 59.29 million tonnes on February 28. This is a decline of about 1.9% in just three weeks. While this may appear manageable at the national level, the situation on the ground is far more uneven.
Coal stocks: A comfortable total, but weak at the edges
The total coal stock stands at 58,169 thousand tonnes, with the majority held by plants having coal linkages at 53,904 thousand tonnes. Imported coal-based plants account for 4,191 thousand tonnes, while other categories contribute a minimal 74 thousand tonnes.
The headline number hides a key issue – stocks are concentrated in some regions, while several critical plants, especially in southern India and imported-coal-based units, are running dangerously low.
Where the stress is building
Around 12,500 MW of capacity is now at critically low stock levels. The pressure is most visible in Tamil Nadu, Telangana, and imported-coal plants.
In Tamil Nadu, multiple plants are operating at just 10-22% of required stock. The North Chennai Stage 3 plant, at just 10%, is particularly vulnerable.
In Telangana, all major plants are below 25%, covering more than 5,000 MW of capacity.
The most serious situation is at imported-coal plants, where nearly 10,000 MW of capacity is running at just 0-17% stock.
Some plants, such as Torangallu and Shree Cement, have reported zero stock, while large units like Adani Mundra (4,620 MW) are operating at extremely low levels.
Imported-coal plants: The weakest link
The stress at imported-coal plants is particularly concerning.
Stocks at major plants range from 0% to 17% of normative levels
Global coal markets are tightFreight costs remain elevated
Supply chains are affected by geopolitical tensions
This combination means that restocking is not just urgent – it is also expensive and uncertain. These plants face the highest risk of shutdown if supplies are not secured quickly.
A sharp deterioration from last year
The situation has worsened significantly compared to March 2025. Last year, there were no major reports of critical stock levels in Tamil Nadu or Telangana. The current stress reflects a mix of:
- Rising power demand
- Logistics and supply constraints
- Volatility in global coal markets
Government steps in – But is it enough?
The government has already started responding. On March 23, it directed Tata Power’s 4,000 MW imported-coal plant in Gujarat to run at full capacity from April to June.
The government has directed Tata Power’s Gujarat-based plant, with a capacity of 4,000 MW, to resume operations at full capacity from April to June 2026. The plant had remained idle due to high coal costs, but this directive aims to bring additional supply into the system during the peak summer period.
This move will add some reliable supply to the system. However, with over 12,500 MW already at risk, the impact is limited. It may only offset part of the shortfall rather than solve the problem.
There are indications that similar directives may be extended to other imported-coal plants, which could bring additional capacity online – but only if coal is available.
The real risk lies ahead
The recent cooling in demand during late March has provided temporary relief. But this could be misleading.
As India moves into April and May:
- Power demand is expected to rise sharply with heat
- Hydro generation will decline as reservoirs are used for irrigation
- Solar cannot support evening peak demand
- Gas and liquid fuels remain constrained
This leaves coal – especially imported coal – as the only reliable option to meet peak demand.
Outlook: A narrow window to act
In the short term, the system still has a chance to stabilise if plants can rebuild stocks before peak summer demand arrives. But time is limited.
If restocking is delayed:
Imported-coal plants may be forced to shut down
Southern states could face supply stress
The system may have to turn to the seaborne coal market quickly and aggressively
In the medium term, renewable energy continues to grow strongly. But coal still provides over 70% of India’s power, and its availability remains critical for grid stability.
The key question
The situation raises a fundamental question for the coming months:
Is India underestimating the risk – and will it be forced into urgent coal buying just as global markets remain tight?
If that happens, the impact will not just be domestic. It could quickly spill over into the global coal market, influencing demand, trade flows, and prices.
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