This paper proposes an intensified water cycle approach (IWCA) to realize an environmentally sound optimal generation schedule for short-term hydrothermal systems over a day’s time horizon considering the conflicting economic and environmental aspects of thermal units. The equality constraints of the active power balance and full utilization of the available amount of water are handled independently using proportional sharing heuristics. The global solution accuracy and convergence rate of stochastic algorithms are significantly affected by parameter-tuning, exploration, and exploitation strategies. For intensifying the algorithm, opposition-based learning and local search are integrated with a chaotically tuned water cycle algorithm based on the natural flow of water toward the sea to balance exploration and exploitation. The numerical results show an improvement in the unified operating cost obtained from the price penalty factor to include the impact of gaseous pollutants and in the convergence performance metrics over the existing methods. The competence of the proposed approach is confirmed through illustrations of standard benchmark problems (unimodal, multimodal, and fixed dimension multimodal) and standard hydrothermal test systems. The performance of the proposed algorithm is substantiated through statistical significance tests, which include convergence curves, whisker box plots, and Wilcoxon signed-rank test.