Coal- and gas-fired power generation in China is on course for an annual decline for the first time since 2015, unless demand surges this month.
Over the first 11 months of the year, electricity generated from coal and gas plants ticked down by a modest 0.7%, Bloomberg reported today, citing government data. In November alone, thermal power output dipped by 4.2%. Unless demand increases significantly in December, the hydrocarbon-based part of China’s power generation mix is set for an annual decline.
Per the Bloomberg report, wind and solar have been instrumental in meeting additional demand for electricity, contributing to the decline in coal and gas generation. In November, wind power output climbed by a substantial 22%, while solar power output jumped by 23% from a year earlier.
However, it is worth noting that just two months earlier, in October, wind power output dipped by 12%, while solar power output inched up by just 5.9%, which was the smallest annual increase since May 2023. Thermal power output, meanwhile, went up by 7.3% two months ago, highlighting the main advantage of hydrocarbon-powered generation, namely, the ability to adjust supply to demand. The generation data suggests October demand jumped sharply, amid hotter-than-usual weather in parts of the country.
Meanwhile, a substantial jump in electricity demand is all but guaranteed this month. In November, the National Development and Reform Commission signaled China was heading into winter, bracing for record power use again, with officials warning that both electricity load and daily gas demand are likely to set new highs. The NDRC says the heating season will run longer this year. That usually means heavier coal burn and more gas in the mix. Beijing says the system is prepared, pointing to 230 million tons of coal in stock—roughly 35 days—but if demand surges high enough, fast enough, supply could become challenging.
By Irina Slav for Oilprice.com
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