India's coal-fired power generation reached a historical high for July, propelled by a weak and uneven monsoon that dampened hydropower generation and drove up cooling demand in the nation.

Coal-fired power generation reached 114.7 TWh in July 2026, rising 13% year on year and surpassing the previous July record of 105.8 TWh set in 2024, showed data from the Central Electricity Authority (CEA). The volume, however, was 2.53% lower than the all-time monthly record of 117.68 TWh in June.

The July record was shaped by a monsoon that arrived late and delivered patchy rainfall. In 2026, cumulative rainfall through late July tracked about 15% below normal, with June alone registering 39% below the long-period average, according to the India Meteorological Department.

This shortfall created a systemic supply shock to India's dispatchable hydro capacity just as electricity demand was climbing. Large hydropower output fell by 18% on the year to 17.7 TWh, as reduced reservoir inflows constrained generation. Water levels at India's 166 major storage facilities stood at about 38.4% of capacity in late July, roughly 36% below the year-ago level, according to the Central Water Commission.

As such, coal-fired power plants were left to shoulder a load-balancing burden that would normally be shared with hydro, especially during the evening peak demand period when solar generation tapered off.

The developing El Nino is expected to further pressure this dynamic. The climate event would weaken the moisture-laden winds that drive the annual monsoon cycle by altering sea surface temperature gradients across the Pacific and Indian Oceans. Its presence adds weight to projections that below-normal rainfall could extend deeper into the third quarter, sustaining elevated coal burns beyond its seasonal peak.

In addition, total generation excluding renewables in India rose by 7.3% from a year earlier to 143.9 TWh in July, exceeding the CEA's monthly plan of 140 TWh by 2.8%. Nuclear generation increased by 19% to 5.4 TWh, data showed. Renewable generation, though excluded from CEA's main measure, is estimated to have reached around 37.5 TWh, up 14.33% from 32.8 TWh a year earlier.

Robust renewable output simultaneously cut coal's share in India's power mix to a one-year low, underscoring a paradox at the heart of India's energy transition.

Meanwhile, demand for imported coal stayed subdued. The increased consumption was met largely by domestic supplies. India's thermal coal imports are estimated at about 11.3 million tonnes in July, down nearly 6% year on year, Kpler's cargo-tracking data showed.

Indian power plants continued to draw on domestic inventories rather than seaborne cargoes. As of July 31, coal stocks at thermal power plants fell to 38.01 million tonnes, sufficient for about 12.18 days of consumption, CEA data showed. The overall inventories were supported by higher coal supplies from state-owned Coal India.