China's Coal-Fired Power Output Drops in July as Hydropower Surges

China's fossil-fuelled power generation recorded its first year-on-year decline of 2026 in July, as abundant summer rainfall in the southwest sharply increased hydropower output and displaced coal-fired electricity.

Data released by the National Bureau of Statistics on Monday showed thermal electricity — predominantly generated from coal — fell 3.5% in July compared with the same month last year. Despite the monthly drop, thermal output was still up 1.8% for the first seven months of the year, following a historic decline in 2025.

The bureau's figures also indicated that overall power demand slipped 0.1% year-on-year to 943.9 billion kilowatt-hours (kWh). Analysts, however, cautioned that the decline may be a statistical artefact. The bureau's survey only covers industrial enterprises with annual revenue above 20 million yuan (about $2.97 million), excluding many smaller renewable producers. Data from the National Energy Administration, which typically arrives later in the month, often paints a different picture.

"Considering the impact of heatwaves across China, we believe July's power demand will maintain year-on-year growth," said Yuxi Wang, an analyst at Wood Mackenzie. The firm continues to project a 5% rise in power demand for the full year 2026.

Hydropower output jumped 6.7% in July and 8.8% over the January–July period. According to Wang's analysis, hydro accounted for roughly half of the decline in thermal generation, with nuclear power contributing 13% and renewables making up the remainder.

Southern China has experienced torrential rain during this year's summer flood season, filling reservoirs in hydro-rich provinces such as Sichuan and Yunnan. Over the first seven months of the year, total power generation rose 3% to 5.7 trillion kWh, the bureau reported.