India's coal-fired power stations produced 25.7% more electricity in October than a year earlier, the fastest annual rise in three years, as hydropower output slumped1. Total generation rose 21.1% to 172.53 billion kWh, according to Reuters calculations of daily Grid-India data reported by The Economic Times1. Coal's share of the mix climbed to 71.7% from 66.03% in September1.
For a factory that buys power, the important part is not the growth rate but the mix. Hydropower fell 26%, the steepest drop since February 20241. Clean energy's share slipped to about 15% from 17%, even though renewable output rose 34.7% to 26.61 billion kWh on a 62% jump in solar generation1. The marginal supply in October came from coal, and coal was already running short.
At one point in October, 100 of India's 191 coal-fired plants were operating on critically low fuel stocks1. Stocks at domestic coal-based plants stood at 18.1 million tonnes on October 28, up from 17.4 million tonnes on October 232. The count of units at critical levels fell to 79 from 892. ICRA's Ankit Jain put cover at around six days on October 10, against a normative requirement of around 19 to 20 days3. Power shortages in September reached 560 million kWh, the highest since August 2023, before easing late in October1.
What it does to power bills
Generating companies are already repricing. Adani Power's fuel cost rose 41.8% to ₹10,229 crore in the September quarter, and its landed imported coal cost rose around 50% from a year earlier5. Chief executive S B Khyalia told investors the recovery through tariffs would lag: "This increase in fuel cost of imported one will get reflected almost after more than six months"5. He also said tariffs, including merchant rates, would have to rise to some extent5.
Industrial captive users feel it sooner than regulated utilities. The Indian Paper Manufacturers Association said coal costs rose more than 50% in two months and that energy is 15% to 20% of paper production cost6. It asked the Prime Minister for priority coal allocation, for at least 75% of Fuel Supply Agreement quantities, and for railway rakes on par with thermal power plants6.
The back-up fuel, diesel, is expensive. Brent crude was $123.1 a barrel on October 27, up 6.8% from a week earlier7. Russia has extended a general ban on diesel exports by producers until the end of January, while preparing exemptions8. Deputy Prime Minister Alexander Novak said November exports would be about 2.15 million tons, after about 510,000 tons this month8.
Rakes go where the grid is short
Coal India moved 257 million tonnes by rail and merry-go-round systems in the first half of the fiscal year, against 123 million tonnes by road9. Merry-go-round is the loop rail service that feeds a single plant. Rakes loaded for power plants averaged 472 a day in October and have been above 490 in recent days2. They fell to 479 on October 27 after weather disruption in the east2.
The buffer is being rebuilt from a smaller base, which matters for every non-power buyer of rail capacity. Coal India's offtake of 384.20 million tonnes outran output of 321 million tonnes in the first half9. That cut its inventory to 66.58 million tonnes from 130.28 million tonnes at the end of March9. ICRA's Ankit Jain said domestic coal production fell 3.2% year on year in the first five months of FY27, while coal supply to the power sector rose 4%3. More tonnes to power stations, from a smaller production base, leaves less for industrial captive plants, which is the complaint the paper mills took to the Prime Minister6.
Imported coal is the release valve. The Baltic Dry Index, which tracks dry bulk rates for coal, iron ore and grain, was 2,714 on October 3010. Global seaborne coal loadings rose 1.1% to 976.0 million tonnes in January to September11. The dollar was worth 94.95 rupees on October 30 and is up 5.7% against the rupee since the start of the year, which raises the landed cost of every imported tonne12.
Forecast against burn rate
The government expects stocks at domestic coal-based plants to rise by around 10 million tonnes by December, helped by more rakes and lower winter demand2. Officials see a fiscal-year closing stock of 35 to 42 million tonnes, and are discussing a 55 million tonne target among the railway, power and coal ministries2. Peak power demand has already eased, from above 240 GW to 217 GW2.
That forecast depends on the weather holding. Australia's Bureau of Meteorology said the relative Nino3.4 index reached +2.88 °C in the week to October 25, the highest in its dataset, which starts in 20084. The bureau said models keep El Nino above threshold into autumn 2027, which in the southern hemisphere runs from March to May4. A strong to very strong event is likely through January to March 2027, with a greater than 83% chance4. Weak hydro pushed the coal burn this year. If El Nino persists, hydro could stay short again before next summer1, 4.
What to watch
November generation data will show whether coal's share holds near 71.7%. CEA daily stock prints matter more than the December forecast: watch whether the 18.1 million tonne figure keeps rising while demand is low. Rake loadings above 490 a day would signal the rebuild is on track, and a slide back towards the October average of 472 would not2. Watch reservoir and hydro readings alongside the El Nino index, which the Bureau of Meteorology expects to stay above threshold into March to May 20274. Buyers signing captive power or PPA contracts should note that the Adani case turned on the size and speed of the fuel cost pass-through, not just the fuel price5.