Coal imports by Indian power producers climbed to a 15-month peak in August, as a heat-wave and weaker hydropower output pushed up electricity demand and forced utilities to buy expensive overseas supplies, traders and analysts said.

Power-sector coal imports rose 85.6% year-on-year to 5.52 million tonnes in August, the highest since May 2025 and the third consecutive month of gains, Reuters quoted local coal trader iEnergy Natural Resources as saying.

Indonesia supplied about 80% of the imports, or 4.2 million tonnes, iEnergy said.

The International Energy Agency said in a report last week that growing electricity demand will keep supporting coal use in India's power sector despite rapid renewable capacity expansion.

IEA expects coal demand to return to its historical growth trend in 2026 after a temporary decline last year, partly driven by rising cooling needs under 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 increased by only 2.3 million tonnes in August, far below the 10 million tonnes rise in consumption.

Government data showed nearly a third of India's coal-fired power plants are running with critically low fuel stocks due to supply constraints and higher usage. The supply gap drove companies to turn to costly imported coal, iEnergy added.

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

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