07 August 2025 at 11:33 pm IST
India’s coal-fired power plants are reducing their reliance on fresh coal purchases from state-owned Coal India Ltd., instead drawing from record-high stockpiles. This shift comes as coal-based electricity generation declined for the fourth consecutive month in July, despite a rise in overall electricity demand. Increased output from hydro and renewable sources such as wind and solar has helped meet energy needs without expanding coal usage. Coal inventories at power plants dropped 13% in July from an all-time high of 58.1 million metric tons at the end of June—far steeper than the average 2% July decline seen over the past decade. Experts note that the ample reserves and no imminent coal shortages have given utilities greater flexibility in managing procurement and costs. However, this reduced dependency on Coal India may be short-term, with expectations that coal demand could rebound as power demand rises. Coal India’s production and supply in July recorded the sharpest declines since 2019 and 2018, respectively. Production fell by 15.6% and supply dropped by 9.9% year-on-year. Meanwhile, private miners are gaining a larger share of the coal market, following the government's move to liberalize coal mining in 2020. While overall power generation rose 1.8% year-on-year to 164.66 billion kilowatt-hours in July, coal’s contribution shrank to 64.3%—its lowest in five years. This was offset by a 22.4% rise in hydropower and a 14.4% increase in renewable energy output. With India commissioning a record 22 GW of solar and wind energy capacity in the first half of 2025, and aiming for 500 GW of non-fossil fuel capacity by 2030, the share of coal in the country’s energy mix is expected to decline further in the coming years.
