China's hydropower output continued its upward trend in July, with generation from large-scale plants rising 6.7% year on year.

July hydropower generation reached 161.6 TWh, up 6.7% from a year earlier and accelerating 1.9 percentage points from June's pace, according to data from the National Bureau of Statistics. Cumulative output for January-July totaled 750.4 TWh, up 8.8% year on year, outpacing thermal (1.8%), nuclear (0.4%) and wind (-0.8%) power growth over the same period, second only to solar.

China entered its main flood season in July, with national average precipitation of 123.0 mm, 1.1% above the long-term average of 121.7 mm, according to the China Meteorological Administration. However, rainfall distribution was highly uneven, featuring a pattern of "more rain in the north and south, drought in the middle reaches", with the upper-middle Yangtze River region — where major hydropower stations are concentrated — receiving notably insufficient rainfall.

Inflow into the Yangtze River basin remained weak overall in July, though tributaries showed divergent trends. The Pearl and Yellow River basins saw improving inflows on rainfall, with the Maerdang hydropower station — the highest-altitude plant on the Yellow River's main stream — posting a record monthly generation since commissioning.

Among major power producers, China Yangtze Power effectively offset the impact of weak upstream inflows through coordinated dispatch of its six reservoirs, with total generation from its six cascade plants in China reaching 132.74 TWh in the first half, up 4.81% year on year. SDIC Power and Sichuan Chuantou Energy both saw first-half generation decline due to weak inflows on the Yalong River, but both turned a corner in July with significant inbound flow growth, expected to support generation and earnings recovery. Guangxi Guiguan Electric Power's first-half hydropower generation rose 57.72% year on year to 21.33 TWh.

July served as a water replenishment window, with reservoirs across river basins primarily storing water to raise storage levels. Entering August, inbound flow at the Three Gorges reservoir recovered rapidly amid heavy rainfall in the Min-Tuo River, Jialing River and Three Gorges areas. With continued inflow recovery in the third quarter and a low base effect, major hydropower companies are expected to see sequential improvement in second-half generation.

Among key hydropower provinces, Sichuan generated 48.80 TWh in July, up 11.9% year on year and accounting for 30.2% of national output. Yunnan generated 40.41 TWh, up 8.3%, representing 25.0% of the national total.

In July, 21 provinces and regions saw hydropower output flat or higher year on year, accounting for 67.74% of all provinces, while 10 recorded declines. Jilin led with 185.8% growth, followed by Heilongjiang (87.2%) and Xizang (85.7%). Shandong posted the sharpest drop at 53.0%.

For January-July, national hydropower generation totaled 750.37 TWh, up 8.7% year on year. The top five producing provinces were Sichuan, Yunnan, Hubei, Guizhou and Guangxi, with cumulative output of 207.65 TWh, 164.95 TWh, 83.17 TWh, 44.33 TWh and 41.49 TWh respectively, up 0.7%, down 0.3%, up 25.9%, up 32.1% and up 34.8% year on year.

On the demand side, July total electricity consumption hit a record high, up 1.7% year on year. Residential power use declined due to a high base from extreme heat last year, while tertiary sector growth continued to lead. Hydropower's share in the July power supply mix increased, with its marginal contribution to meeting demand strengthening.

Meteorological data indicates August 2026 rainfall will continue to show marked regional divergence. East and South China are expected to see above-normal precipitation in autumn, but the middle Yangtze region remains dry, leaving the outlook for basin inflow improvement uncertain.

The third quarter is still expected to be dominated by below-normal inflows. The lingering El Nino effect will keep temperatures elevated across most of the country, sustaining firm power demand. August may also see more and stronger typhoons than usual, potentially bringing periodic heatwaves or localized heavy rainfall that could affect power supply.

Overall, the trend of hydropower inflow recovery in the third quarter is clear, particularly in the Yalong River and Hongshui River basins, where low base effects combined with improved inflows could drive sharp year-on-year generation growth for related companies. However, the pattern of weak inflows in the middle Yangtze is expected to persist, with regional divergence remaining the dominant theme for third-quarter hydropower.