China’s Efforts to Ensure Summer Power Supply Get an Assist from Air-Con Trade-Ins

Air conditioning units hanging from a building in Beijing, China, on Thursday, Aug. 1, 2024. China's main grid operator will raise spending to a record to ease transmission bottlenecks, underscoring Beijing's push to boost renewable-energy usage and potentially benefiting metals including copper. Photo by Na Bian /Bloomberg

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(Bloomberg) — China’s efforts to ensure power supply through punishing summer heat are getting a boost from a government trade-in program that’s allowed millions of households to upgrade to more efficient air-conditioners, according to a new report. 

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The combined impact of the swaps could be enough to shave off 4.1% of residential electricity demand this summer, according to research published on Tuesday by climate think tank Ember. That’s enough electricity saved to power Iceland for an entire year. The initiative, which started last year and will continue at least through December, offers rebates to exchange older cooling units, other household appliances, and even vehicles for newer ones that are more energy efficient.

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The efficiency boost comes as overall air-conditioning use exacts a heavy toll on China’s power system. Earlier this month, the country’s power demand hit a new peak 150 gigawatts higher than in 2024 — the equivalent of having to meet all of the electricity generation in France in just a year, according to BloombergNEF data. About 90% of that new load came from air-conditioners and refrigeration, according to a report in state-owned People’s Daily. 

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The use of coolers has grown in China in recent years, as brutal summer heat and rising incomes drive sales of the power-sucking devices. The country had 146 air-conditioners per 100 homes in 2023, up from 31 in 2020, according to Ember. That surge has made the hotter months the clear peak demand season for the grid, and last year was a major factor in rising coal emissions despite rapid expansion in wind and solar plants. 

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“Rising residential cooling needs are adding increasing pressure to the power grid,” Biqing Yang, an Ember analyst, said in the report. “Integrating energy efficiency targets within economic stimulus measures presents a strategic opportunity to advance both economic growth and the clean energy transition.”

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Air-conditioners can use variable fan speeds, different coolants and more optimal coiling designs to use less electricity to pump out the same amount of chilled air.

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The trade-in program aims to promote the most efficient models, limiting power consumption while at the same increasing demand for goods from domestic factories. The government allocated 150 billion yuan ($21 billion) last year and another 300 billion this year for consumer rebates on more efficient electronics, household appliances and vehicles. Air-conditioner trade-ins will save consumers as much as $943 million in power bills this year, according to Ember.

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