India’s scorching summer sends coal imports to 15-month high in August

New Delhi: Indian power producers' coal imports in August rose to a 15-month high as a heat-wave and lower hydropower generation boosted electricity demand, prompting utilities to turn to costly overseas supplies, traders and analysts said.

Coal imports by India's power sector jumped 85.6% year-on-year to 5.52 million metric tons in August, their highest level since May 2025, in a third straight month of higher imports, according to local coal trader iEnergy Natural Resources.

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About 80% of the imports, or 4.2 million tons, came from Indonesia, iEnergy said.

Rising electricity demand will continue to prop up coal use in India's power sector despite the rapid expansion of renewable capacity, the International Energy Agency said in a report last week. The IEA expects coal demand to return to its historical growth trend in 2026, following a temporary decline last year, driven in part by growing cooling needs amid El Nino conditions.

"Coal consumption surged more than expected in August, while domestic supply couldn't fully keep pace, driving many plants towards imported coal," iEnergy said.

Domestic coal dispatch to the power sector rose by only 2.3 million tons in August, well short of the 10 million-ton increase in consumption.

Nearly a third of India's coal-fired power plants are operating with critically low fuel stocks due to supply constraints and higher usage, government data showed.

The supply gap pushed companies to turn to costly imported coal, iEnergy added.

Indonesian coal prices have risen 18% to 20%, while Russian and South African prices have jumped 14% and 19%, respectively, since May, traders said.

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Lower hydropower generation due to reduced rainfall, coupled with insufficient battery storage to capture surplus daytime solar power also increased pressure on coal-fired generation, said Manoj Kumar, an analyst at the Centre for Research on Energy and Clean Air.