- Evening shortages persist amid non-solar power scarcity
- Coal burn heads towards 80 mnt as stocks decline by 19%
India’s power system is showing increasingly clear signs of tightness in the final week of August, as electricity demand remains close to 250 GW, actual supply shortages persist during non-solar hours, and prices on the Indian Energy Exchange repeatedly hit the regulatory ceiling.
The immediate consequence for the coal sector is equally visible. Despite some improvement in daily coal receipts, thermal plants continue to consume more coal than they receive. Cumulative coal burn at monitored plants has reached around 67.4 mnt during 1-26 August, putting the system on a run-rate of roughly 80 mnt for the full month, while power-plant inventories have fallen below 31 mnt.
Power demand remains close to 250 GW
All-India maximum demand remained consistently elevated during 24-26 August.
The geographical concentration is important. On 24 August, the entire 1,513 MW evening shortage was recorded in the northern region.
Conditions tightened further on 25 August, when the northern region alone recorded a 1,993 MW evening shortage, while smaller deficits emerged in the western and north-eastern regions. The national energy shortage almost doubled to 8.23 MU.
Shortages eased somewhat on 26 August but did not disappear, with 1,350 MW still unmet in northern India during the evening peak and another 50 MW in the north-east.
The data do not establish that these shortages were caused solely by coal availability. But they demonstrate that the system is struggling to satisfy demand consistently, particularly once solar generation falls away.
IEX shows acute non-solar scarcity
The Day-Ahead Market provides an even clearer indication of the tightness.
During 24-27 August, IEX prices repeatedly reached the INR 10,000/MWh ceiling, particularly overnight, during the early morning and again during evening hours.
On 24 August, the ceiling was reached for 15 hours. Even after easing during the solar-rich middle of the day, prices returned to INR 10,000/MWh from 18:00 through midnight. At 23:00, purchase bids reached 50,757 MWh against sell bids of only 1,529 MWh.
The pattern persisted.
Average weighted DAM prices remained at INR 7,298/MWh on 24 August, INR 6,801/MWh on 25 August, INR 6,347/MWh on 26 August, and INR 6,631/MWh on 27 August. Scheduled market volume also rose to 183,257 MWh on 27 August, the highest of the four-day period.
The striking feature is the sharp separation between daytime and non-solar prices. Midday prices frequently fell below INR 2,000-3,000/MWh as renewable availability improved, only to return rapidly towards or to the INR 10,000/MWh ceiling as the system entered the evening.
This suggests that India currently has less of an aggregate energy shortage than a firm-power problem during specific hours.
Thermal generation remains heavily utilised
Coal remains central to meeting this requirement.
Coal-fired generation reached 3,853 MU on 24 August, 3,759 MU on 25 August and 3,688 MU on 26 August, accounting for 62-65% of gross generation.
Renewable generation strengthened from 991 MU to 1,223 MU over the same period, but hydro generation weakened from 725 MU to 680 MU. On 26 August, coal still supplied 3,688 MU against only 680 MU from hydro.
The increase in renewables has helped reduce coal’s percentage share and marginally lowered daily coal burn. It has not removed the need for high thermal availability, particularly outside solar hours.
Aug’26 coal burn approaches 80 mnt run-rate
That requirement is now visible in the physical coal balance.
During 1-23 August, CEA-monitored plants had already burned approximately 59.46 mnt while receiving only 52.93 mnt, creating a 6.53 mnt cumulative supply deficit.
Adding 24-26 August takes estimated cumulative receipts to around 59.68 mnt, against coal consumption of approximately 67.40 mnt.
Receipts have improved late in the month. The daily deficit narrowed from around 0.6 mnt on 24 August to 0.38 mnt on 25 August and around 0.21 mnt on 26 August. But receipts are still below burn.
Coal stocks absorb imbalance
Power-plant inventories are consequently acting as the balancing mechanism.
Coal stocks stood at approximately 37.83 mnt on 1 August. By 23 August they had already fallen to 31.95 mnt, a decline of 15.5%. By 26 August, inventories had fallen further to approximately 30.73 mnt.
That represents a drawdown of about 7.1 mnt, or nearly 19%, during August so far, while 45 plants remain classified as critical.
The key issue is therefore no longer whether India can produce enough coal in aggregate. The system must deliver enough coal to power plants quickly enough to support an approximately 80 mnt/month utility burn rate while simultaneously rebuilding depleted inventories.
That becomes increasingly challenging as demand remains elevated and hydro output stays weak.
The combination of persistent evening shortages, repeated INR 10,000/MWh DAM prices, and rapidly declining coal inventories sends essentially the same signal: India’s power system currently has very little spare flexibility during high-demand non-solar hours.
Unless coal receipts move decisively above consumption, maintaining high thermal generation through September will continue to come at the expense of power-plant stocks.
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