As coal mining soars, coal stocks at India's power generators have hit their highest-ever level for this time of year despite record coal-fired power production to meet surging demand.
Coal-fired power generators had amassed as many as 44 million tons of coal as of the end of February, nearly double the 26 million tons stockpiled at the same time in 2022, per data from India's Ministry of Power analyzed by Reuters market analyst John Kemp.
Currently, stocks at India's coal-fired power generators are sufficient to cover more than 15 days of the minimum requirement, compared to fewer than 10 days of cover in February 2022, per Kemp's estimates.
In the spring of 2022, India was facing a coal crunch as coal inventories at utilities were at the lowest for the time of the year in nearly a decade, while power demand was surging.
In the autumn of 2021, India's massive coal fleet was running out of coal, too, threatening a power crunch in the country that relies on the dirtiest fossil fuel for most of its electricity generation.
Coal continues to be the major power-generating fuel in India, accounting for 70% of electricity generation.
In the two years since 2022, India has boosted its coal mining production and prioritized coal by rail deliveries to power generators to ensure security of supply amid soaring electricity demand.
In November 2023, India's Ministry of Coal said that it aims to produce 100 million tons of coal from underground mines by 2030 as part of a plan to stop coal imports by 2025-2026.
To meet surging power demand, India also announced at the end of last year it would increase the size of its thermal power fleet by adding another 88 GW of new power capacity by early 2032-63% more than the plan that India published just months ago. Most of the new capacity will be coal-fired power, with gas-fired electricity generation unavailable to India due to the high cost of natural gas.
India expects to add a large chunk of coal-fired power capacity in 2024, which will be the largest yearly rise in its coal fleet in at least six years.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More