India Orders Captive Coal Plants to Maximise Power Output Amid Surging Demand

New Delhi: India has ordered more than 100 captive coal-fired power plants to run at maximum capacity from October 1 through December 31, 2026, as the government prepares for a further increase in electricity demand, according to a Reuters report.

The directive covers 112 captive power plants with a capacity of at least 50 MW, including facilities operated by major industrial companies. The move is aimed at ensuring adequate electricity supply during a period when power consumption has been rising and coal inventories at generating stations have come under pressure.

Why has the government issued the order?

India has experienced a sharp increase in electricity demand amid hotter-than-usual weather. The Reuters report said the rise has been associated with the El Niño climate pattern, which has contributed to higher temperatures and greater use of cooling equipment.

The country's thermal power sector has consequently faced increased pressure to maintain generation. Nearly 40% of India's coal-fired power plants were reported to have critically low fuel stocks in September, according to government data cited by Reuters.

Data from CRISIL also showed that coal inventories at Indian thermal power plants fell by around 42% year-on-year to 29 million tonnes in August 2026. The available stock cover dropped to approximately nine days, its lowest level since November 2023.

Power generation has been rising

India's electricity generation has also increased significantly. Government data showed that electricity generation rose 11.6% year-on-year in August, while overall core-sector output increased 4.8%. At the same time, coal production declined 3.8% during the month.

The combination of higher electricity demand and pressure on coal supplies has prompted authorities to focus on maximising available generating capacity.

Captive plants to play a bigger role

Captive power plants are generally operated by industrial companies to meet their own electricity requirements. The latest directive seeks to ensure that these facilities operate at full capacity and contribute more power to the overall electricity system during the high-demand period.

The government has also been working to increase coal movement to power plants. The Ministry of Coal said coal loading to the power sector had risen to 444 rakes per day on September 6, up from 370 rakes on September 3, reflecting efforts to improve supplies.

Coal India also reported that it supplied 322.90 million tonnes of coal between April and August of the current financial year, 6.7% higher than the corresponding period a year earlier.

Focus on electricity security

The latest order reflects the government's efforts to keep electricity generation running at high levels during a period of strong demand and constrained fuel inventories.

With coal continuing to account for a substantial share of India's electricity generation, ensuring adequate fuel supplies and maximising existing thermal capacity remain important for maintaining grid reliability through the final months of 2026.