As India approaches the summer of 2025, the central government is proactively implementing measures to ensure a stable and sufficient coal supply to meet the anticipated surge in electricity demand. The government’s strategic initiatives focus on augmenting domestic coal production, optimising logistics and enhancing coordination among key stakeholders. From surging coal production to policy interventions enabling peak power generation, the country is implementing a multi-pronged strategy to
ensure uninterrupted power supply during this summer.
Coal production, despatch trends
Coal contributes 55 per cent of the national energy mix and over 74 per cent to the total power generation in the country. India’s coal production sector surpassed the 1 billion tonne mark in cumulative production in 2024-25. During the year, it produced approximately 1,047.57 million tonnes (mt) (provisional) of coal, marking a 4.99 per cent increase over 997 mt in the previous fiscal year. Notably, Coal India Limited (CIL) remains the dominant contributor, accounting for over 700 mt. Commercial and captive entities contributed 197.5 mt, reflecting a substantial growth of 28.11 per cent over the past year.
Coal despatches reached 1,024.99 mt during 2024-25, a 5.34 per cent rise from the previous year. Despatches from commercial and captive entities grew by 31.39 per cent, totalling 196.83 mt. As of March 2025, coal stock at domestic coal-based power plants stood at 53.49 mt, sufficient for approximately 20 days at an 85 per cent plant load factor. Including stocks at coal mines and in transit, the total available coal stock in the country exceeded 110 mt, providing strong backup ahead of peak demand months.
Coal consumption by power sector
Domestic coal consumption during April-February 2025 by the power sector increased to 749.1 mt from 724.7 mt in the corresponding period of 2023-24. During April-February 2025, the imported coal consumption fell marginally to 57.4 mt from 59 mt in the corresponding period of 2023-24.
According to the Ministry of Power, the peak electricity demand in India could cross 273 GW in June 2025 – setting a new record. In line with this, the power sector’s coal requirement is projected at 906.1 mt for 2025-26. In response, the Ministry of Coal has committed to supply the entire demand, ensuring that power plants have adequate fuel to operate efficiently during peak summer months.
Additionally, to facilitate seamless coal supply, an interministerial subgroup comprising representatives from the ministries power, coal, and railways; the Central Electricity Authority (CEA); CIL; and Singareni Collieries Company Limited convenes regularly. This group focuses on operational decisions to enhance coal despatch to thermal power plants.
Recently, imported coal-based power plants were granted permission to operate at full generation capacity beyond April 30, 2025, providing essential support during periods of heightened electricity demand. The Ministry of Power has extended a directive under Section 11 of the Electricity Act, mandating all coal-based thermal power plants to run at full capacity, even if it requires the use of imported coal. This decision aims to ensure reliable and steady electricity supply to prevent power outages.
Complementing these efforts, the CEA has advised power plants to maintain higher-than-normal coal stock levels, particularly in regions forecasted to experience extreme temperatures, to ensure uninterrupted power supply.
Initiatives are also being taken to improve coal supply logistics. In 2025-26, Indian Railways plans to deploy 470 coal rakes daily, a 7 per cent increase from the previous year, to meet the anticipated peak power demand. This strategy includes adding 4,000-4,500 wagons by April and potentially allocating an
additional 3,000 wagons if demand rises further.
Outlook
While immediate efforts are centred on ensuring energy stability during peak summer, the government is simultaneously advancing long-term goals aimed at strengthening India’s energy security. This includes improving domestic exploration and mining efficiency through the adoption of advanced technologies and streamlined regulatory processes. The focus is gradually shifting towards more sustainable practices such as coal gasification, the use of conveyor systems for transportation and the implementation of smart logistics solutions to minimise transit losses. To sustain the momentum in production, incentives for private sector participation and public-private partnerships are being offered with an ambitious target of meeting 100 per cent of the power sector’s coal requirements through domestic sources in the coming years.
Akanksha Chandrakar