India’s power sector is facing a growing supply squeeze as near-record electricity demand drives spot prices higher and coal stocks at thermal power plants fall to critically low levels. The average day-ahead market clearing price on the Indian Energy Exchange (IEX) rose 105 per cent year-on-year to Rs. 7.3 per unit in September.

The Central Electricity Authority said the number of power plants with critically low coal stocks had risen to 90 by Monday, the highest level on record. The country’s 190 thermal power plants held 20.5 mn t of coal, equivalent to only 33 per cent of their normative stock requirement.

Demand has remained unusually strong. Peak electricity demand reached 269 GW on September 10, while power traded on IEX increased 10.4 per cent year-on-year to 12.22 bn units in September. National electricity consumption rose 11 per cent to 162 bn units during the month.

The pressure is particularly acute at NTPC, India’s largest power generator. Its coal stocks have fallen to 5.2 mn t, enough to support operations for only seven days at most plants, compared with 18.7 mn t in April, when supplies covered about 25 days. NTPC operates 50 power plants, and several pithead facilities dependent on Northern Coalfields have faced supply-related maintenance problems.

NTPC has increased captive coal production by 20 per cent since April and is diversifying procurement through commercial and captive miners in Odisha and West Bengal, as well as state-owned NLC. The company has about 50 mn t of captive coal and is targeting an additional 10 to 15 mn t from commercial mines in 2026-27. Coal India’s supplies to the power sector rose 10.6 per cent year-on-year to 48.9 mn t in September, while overall supplies increased 12.5 per cent to 61.2 mn t, according to the coal ministry. In the second quarter, IEX electricity trade rose 12.7 per cent to 39.685 bn units and national consumption increased 11.5 per cent to 502 bn units.