Coal India records highest-ever July dispatches as weak monsoon boosts thermal power demand

Supplies to the power sector, the company’s largest consumer segment, rose 18% to 49.77 MT in July from 42.35 MT a year earlier.

The sharp rise in coal production and dispatches comes as below-normal monsoon rainfall has increased the power system’s reliance on coal-fired generation amid a decline in hydroelectric output.

The southwest monsoon, which lasts until September, has been affected by an intensifying El Niño, resulting in drier-than-normal conditions across large parts of the country.

Although rainfall improved in July after a significantly dry June, the recovery has been insufficient to erase the seasonal deficit, with cumulative rainfall still about 13% below normal. The weak monsoon has also kept electricity demand elevated for cooling and irrigation, pushing the country’s peak power demand to 270 gigawatts (GW) in July.

Growing reliance on coal amid hydro squeeze

The rainfall deficit has significantly squeezed hydropower generation, increasing the country’s dependence on coal-fired electricity.

Hydroelectric generation declined 10.75% year-on-year to 54,019.42 million units (MU) during April 1-July 30, 2026, from 60,522.95 MU in the corresponding period last year, according to data from the National Power Portal (NPP).

The decline was even steeper during July, when hydroelectric generation fell 18.10% year-on-year to 17,107.57 MU during July 1-30, 2026, compared with 20,888.03 MU in the corresponding period of the previous year.

As hydro output weakened, coal-fired generation increased to bridge the gap.

Coal-based power generation rose 9.49% year-on-year to 463,995.61 MU during April 1-July 30, 2026, from 423,764.78 MU a year earlier.

The reliance on thermal power was even more pronounced during July, with coal-fired generation rising 13.08% year-on-year to 111,095.89 MU during July 1-30, 2026.

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.

‘Improvement in overburden removal’

CIL also informed the exchanges that the company has also recorded a significant improvement in overburden (OB) removal, a key mining activity that supports sustained coal production.

During July FY27, overburden removal increased by 21.11% to 120.35 million cubic meters (MCuM) from 99.36 MCuM in July FY’26, the company said.

On a cumulative basis, overburden removal during April-July FY27 stood at 625.02 MCuM, registering a growth of 2.85% over the corresponding period of the previous fiscal.

“Overburden removal is a critical precursor to opencast coal mining. It involves the excavation of soil, rock and other materials overlying the coal seam to expose coal reserves for extraction. Timely and adequate removal of overburden ensures uninterrupted access to coal seams, facilitating sustained production,” the company added.