3 min readNew DelhiJul 3, 2026 02:00 AM IST
First published on: Jul 3, 2026 at 02:00 AM IST
The country is leaning more heavily on coal to meet surging electricity demand this summer, as rainfall deficit has squeezed hydropower output. Hydro generation fell 19.5% year-on-year (y-o-y) to 13,361.96 million units (MU) in June, down from 16,593.07 MU a year earlier, according to data from the National Power Portal.
At the same time, coal-fired generation climbed to 117,677.69 MU in June 2026, the highest for the month in the past three years. That was 13.9% higher than June 2025, 3.9% above June 2024, and 14% higher than June 2023.
Coal-fired generation increased amid a 40% rainfall deficit in June, while the India Meteorological Department (IMD) has forecast below-normal rainfall for July as well. The weak monsoon has also kept electricity demand elevated for cooling and irrigation, pushing peak power demand to 264.76 gigawatts (GW) in June.
This year’s situation stands in contrast to last year, when hydroelectric power played a crucial role in meeting evening peak demand during summer when solar output drops. However, rainfall deficit has altered the equation. With hydro generators prioritising reservoir conservation, grid operators are relying more on thermal sources in providing flexible peak-hour generation.
Stress on coal power
Throughout the April-June period this year, coal-fired generation has remained elevated, with output climbing to 352,725.38 MU — the highest for the period since 2023. The sustained reliance on thermal power also pushed coal consumption at power plants above supplies during the first two months of the quarter.
Latest data from the Central Electricity Authority shows the country’s 223 GW thermal fleet consumed 156.8 million tonnes (mt) of coal during April-May 2026, against supplies of 147.2 mt, resulting in a drawdown in inventories.
The higher thermal generation reflected the need to meet sustained demand from elevated night-time temperatures and agricultural consumption amid a monsoon rainfall deficit, a senior official said.
However, coal supplies to the power sector gathered some pace in June, with dispatches by Coal India Ltd (CIL) — the country’s largest coal miner — rising 7.5% y-o-y, according to company data.
That marked a sharp acceleration from the 2.2% growth recorded in May, indicating stronger coal movement to power plants as thermal generation remained elevated. Notably, CIL accounts for about 83% of the coal supplied to the power sector in India, while nearly 80% of its total offtake goes to power utilities.
Grid operators turn to gas-based power
The sluggish progress of southwest monsoon has also prompted the country’s top grid operator to turn to expensive gas-based power this summer. On June 29, Grid Controller of India (Grid India) issued an advisory asking gas-based power stations to plan fuel procurement arrangements, anticipating the need for additional gas-fired generation for 10-15 days in July.
The assessment is based on projected demand, planned and forced outages of generating units, hydro, renewable generation profiles and present weather information available on IMD, the advisory read. Similar advisories were issued for June as well. This comes as the conflict in West Asia has cast a shadow over fuel availability for gas-based power plants this year. During April-June period, gas-based power generation fell to 6,594.81 MU from 8,794.35 MU in the same period last year, marking a 25% y-o-y decline. Even though gas-based power accounts for only a small share of India’s overall generation mix, it plays a crucial rebalancing role during evening peak hours.
However, coal supplies to the power sector gathered some pace in June, with dispatches by Coal India Ltd (CIL) — the country’s largest coal miner — rising 7.5% y-o-y, according to company data.
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