Power generation in China jumped by the most in October in nearly two years and overall electricity output was at its highest for any October since at least 1998, as a heat wave hit southern China while temperatures were colder-than-usual in the north.
China’s power generation surged by 7.9% in October from a year earlier, with total output at 800.2 billion kilowatt-hours (kWh), data from the National Bureau of Statistics showed on Friday.
The October generation hit the highest for the month of October since at least 1998, according to Reuters estimates.
Thermal power output, the one from coal, jumped by 7.3% last month. Wind power generation slumped by 12% and solar electricity generation from utility-scale plants increased by 5.9%, the smallest annual rise since May 2023, per Bloomberg estimates.
Coal likely picked up most of the surge in electricity generation, while wind and solar power saw curtailments, analysts say.
The likely reasons for the big jump in coal and gas generation were weather variation affecting residential and commercial power demand, and solar and wind curtailment, Lauri Myllyvirta, co-founder of Finland-based Centre for Research on Energy and Clean Air (CREA), wrote on LinkedIn in comments on the Chinese data.
“The drop in wind power generation and weak increase in solar generation reported by the stats bureau indicates that capacity utilization fell sharply, more than can be accounted for by weather conditions,” Myllyvirta said.
“The concern is that we’re seeing a repeat of what happened at the end of last year when grid operators had contracted too much coal power under long-term contracts and decided to curtail solar and wind instead of facing the penalties from not fulfulling the coal contracts.”
The power generation data suggests that there must also have been a sharp increase in China’s power demand in October. Since industrial production numbers don’t suggest a demand surge, the residential and service sectors were the likely reason, according to Myllyvirta.
“October was unusually hot in the south, and much colder than previous years in the north. The rapid increase in air conditioner ownership means that people are using them more for heating in northern China, especially before district heating is turned on in November,” the analyst noted.
By Tsvetana Paraskova for Oilprice.com
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