India has achieved its highest coal production in 2023-24, reaching 997.826 million tonnes, an 11.71% increase from 893.191 MT in 2022-23. The Ministry of Power has projected a domestic coal requirement of 906.1 MT for 2025-26, which the Ministry of Coal has committed to supplying.
Coal companies and an Inter-Ministerial Committee monitor coal supply augmentation and power generation capacity. Union Minister of Coal and Mines Shri G. Kishan Reddy provided this information.
Coal remains a crucial component of India’s energy mix, supplying over 70% of the country’s electricity needs. As power demand continues to rise due to rapid industrialization and urbanization, ensuring a stable and efficient coal supply chain is vital for energy security. The Indian government and coal producers are working to strengthen logistics and optimize coal distribution to meet growing electricity demand.
Coal Production and Supply Chain Management
India is the world’s second-largest coal producer, with Coal India Limited (CIL) and other private players contributing to domestic supply. However, meeting power sector demand requires a well-coordinated logistics network. Despite record production levels, seasonal fluctuations, transportation bottlenecks, and supply chain inefficiencies often lead to shortfalls at power plants.
To address this, the government has taken several initiatives, such as increasing coal output, expanding coal washeries to improve fuel quality, and prioritizing supply to power plants with low stock levels. Additionally, long-term fuel supply agreements (FSAs) between coal producers and power companies ensure a steady supply of coal.
Rail and Road Logistics for Coal Transportation
Efficient coal transportation is critical for ensuring timely supply to power plants. The majority of coal in India is transported via the Indian Railways, which operates dedicated freight corridors to enhance delivery efficiency. The GatiShakti National Master Plan aims to improve rail connectivity to coal mines, reducing transportation delays.
The introduction of rail-sea-rail transportation is also gaining momentum, allowing coal to be transported through ports for last-mile connectivity. Meanwhile, the use of coal conveyor systems and Merry-Go-Round (MGR) rail networks within mining regions helps streamline coal movement to power plants.
Addressing Supply Chain Challenges
Despite improvements, coal supply chain challenges persist. The monsoon season often disrupts coal mining and transportation, leading to temporary shortages at power plants. Additionally, logistical constraints such as rail congestion and inefficiencies in coal unloading contribute to supply mismatches.
To mitigate these challenges, the government is promoting pithead thermal power plants—power stations built near coal mines to minimize transportation delays. Increasing domestic coal production and import diversification are also being explored as contingency measures.
Role of Imported Coal in Meeting Demand
Although India aims to reduce its dependence on coal imports, imported coal plays a crucial role in balancing supply shortages. Coastal power plants, particularly in states like Tamil Nadu and Gujarat, rely on imported coal for uninterrupted operations. The governmenT plants to maintain adequate coal stockpiles, blending imported coal with domestic supplies to prevent shortages during peak demand periods.
Future Outlook and Sustainability Measures
To ensure long-term energy security, India is focusing on improving coal logistics while transitioning towards cleaner coal technologies. The adoption of coal gasification, carbon capture and storage (CCS), and efficient combustion technologies can help minimize emissions from coal-fired power generation.
As power demand continues to grow, strengthening the coal supply chain through infrastructure upgrades, digital tracking systems, and better coordination between coal miners, transporters, and power producers will be crucial. While renewable energy sources are expanding, coal will remain a dominant energy source in India’s electricity mix for the foreseeable future, necessitating continuous improvements in its supply chain and logist.
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