China’s Top Power Lobby Says It’s Ready for Winter Demand Surge

5yci7cfagr3uoyf9qsubo2d0_media_dl_1.png National Energy Administration

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(Bloomberg) — China’s electricity companies are confident that ample coal and gas supplies, and an abundance of renewables, will allow them to meet the usual end-year surge in demand without upset.

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Power consumption growth in the fourth quarter is expected to increase at its fastest pace this year, thanks to a low base for comparison and improving economic conditions, the China Electricity Council said in a report on Monday. October has already seen coal consumption at power plants rise above historic trends due to prolonged heat in eastern megacities, according to a recent note from Morgan Stanley analysts including Hannah Yang. 

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Elevated heating needs over winter, along with air-con use in the summer, typically generate anxiety over whether China can deliver enough power to cope. Having pulled out the stops to bullet-proof supplies after widespread blackouts earlier this decade, the authorities have become more sanguine about the challenge.

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Plentiful coal in particular should ensure supply, which is expected to be generally in balance with demand over the winter, although northern and eastern grids could see some tightness during peak hours, China’s top power lobby said in the report.

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Power Mix

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Clean energy is also becoming increasingly important. Accumulated wind and solar installations have already surpassed thermal power, and the expected addition of another 400 gigawatts this year would take their share to nearly 47% of China’s power mix, the council said.

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New wind and solar generation have met nearly all of the increase in demand this year, with coal power falling 2.4% and hydropower also declining. The council’s forecast implies fourth-quarter installations will rebound to 99 gigawatts, after falling to just 38 gigawatts in the third quarter, following the adoption of new power market rules.

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Even with the late-year surge in demand, total power consumption in 2025 should rise just 5%, the council said. That’s lower than its 6% forecast at the start of the year.

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Manufacturing, which uses the most electricity, has seen relatively muted demand growth of 3.2% so far this year, although the high-tech industries favored by the government were nearly double that. At the other end of the scale, electric vehicle charging ballooned 45%, the council said.

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On the Wire

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