NTPC Seeks Increased Coal Purchases to Address Fuel Shortages
NEW DELHI – India’s largest power producer, NTPC, is planning to procure more coal from private mining companies to tackle fuel shortages and meet the growing demand for electricity, according to sources familiar with the situation.
With an extended summer and reduced hydropower generation affected by the El Niño weather pattern, India is increasingly dependent on thermal power to fulfill its rising energy needs, as indicated by government data.
In September, the power deficit reached its highest level in over three years, even as coal-fired plants operated at increased capacities. NTPC, which typically relies on Coal India—the world’s largest coal producer—did not respond to requests for comments.
The utility’s coal reserves have plummeted from 18 million metric tons in April to just 5.5 million tons. This decline is attributed to increased power generation and difficulties in local supply replenishment due to heavy rains in mining regions.
NTPC is currently negotiating to acquire up to 15 million tons of coal from private firms and intends to utilize about 50 million tons from its own mining operations. If coal supply does not improve, NTPC is predicting significant power shortages at the start of next year.
In light of the rising electricity demand, NTPC’s coal consumption is expected to increase to nearly 300 million tons in the 2026/27 fiscal year, up from the average of 270-280 million tons. Alarmingly, around 47% of India’s power plants are facing critical coal shortages, with fuel supplies only enough to generate electricity for less than four days at these facilities.
To mitigate these power shortages, the federal power ministry recently directed over 100 captive coal-fired power plants to operate at full capacity from October 1 through the end of the year.
Additionally, the Indian government is contemplating mandatory blending of imported coal at power plants due to domestic supply issues, as previously reported.
On a positive note, India’s federal coal ministry announced that Coal India has increased coal supplies to power plants following the recent rains in mining areas. Despite ongoing efforts to expand renewable energy sources, coal continues to play a vital role in India’s energy landscape, as the country seeks to balance its energy needs with climate commitments.
