(Bloomberg) -- Coal India Ltd., which accounts for about four-fifths of the nation’s output of the fuel, is aiming to boost supplies to power plants this summer as unusually hot weather drives electricity demand.
The state-run miner is increasing coal output and building stockpiles at its mines this month to meet supply commitments, the company said in a Tuesday statement.
Electricity consumption is set to jump with India’s weather officials predicting another round of scorching heat waves, which could put the power system under severe strain and threaten food supplies. The country experienced its hottest February in more than a century last month, pushing electricity demand to near record levels. Peak power demand is forecast to hit a new high in April.
“We are fully cognizant of the importance of meeting the demand surge,” the company said in its statement.
Coal India’s preparations follow a power crunch last summer when several parts of the country witnessed blackouts. Electricity demand soared due to record-breaking high temperatures and a rebound in industrial output after the pandemic. Russia’s war in Ukraine added to the problems, pushing seaborne coal prices to an all-time high and forcing Indian consumers to compete for already stretched domestic supplies.
The fossil fuel plays a major role in India’s power generation as it helps produce about 70% of the country’s electricity needs. Domestic supplies often fail to keep pace with high demand because of factors including an inadequate railway network, the most-preferred mode of transport for coal users.
Stockpiles of coal at power stations are expected to touch 32 million tons by the end of this month, well short of the government’s target of 45 million tons.
Coal India plans to boost inventory at its mines to 68 million tons by the end of this month and has lifted a target for supply to grid-connected power producers to 610 million tons in the 12 months from April. The producer is seeking to transport 585 million tons to power stations in the current fiscal year.
(Updates to add comment in fourth paragraph and chart)
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