News and intelligence on carbon markets, greenhouse gas pricing, and climate policy

Published 08:51 on September 16, 2022  /  Last updated at 08:51 on September 16, 2022  /  China, China's National ETS, China's Offset Market, China's Pilot Markets  /  No Comments

China’s thermal power generation in August jumped by 14.8% from a year ago, outpacing a 9.9% gain in overall power output, as concerns over energy security continue to grow, government data showed Friday.

Thermal power generation last month totalled 598.9 TWh, up 7.7% from the previous month, according to data released by the National Bureau of Statistics (NBS).

That pushed thermal power generation for the first eight months of the year to 3,883 TWh, almost unchanged compared to the same period last year, though the country has pledged to “strictly limit increasing coal consumption” in the next few years.

Power generated by coal-fired plants last month remained the primary power source for China, taking up around 73% of total power generation, compared to 69% in July.

Wind power and solar power generation last month rose 28.2% and 10.9% on an annual basis, respectively, while hydropower and nuclear generation fell by 11.0% and 0.6%, NBS data showed.

For the January-August period, power generation amounted to 5,598 TWh, up 2.5% from a year ago, NBS data showed.

A separate announcement by the National Energy Administration showed power consumption rose 10.7% YoY last month, and by 4.4% for the January-August period.

The momentum for power consumption growth was mainly supported by the needs of the residential sector, which posted a 33.5% annual gain last month, while the demand growth in the industrial sector remained lukewarm amid the country’s slow economic recovery, data showed.

Those numbers came as China has been ramping up its consumption of coal to satisfy rising domestic demand, claiming to ensure energy security by all means, especially after a hydropower-reliant province reported power shortages triggered by an unprecedented drought amid heat waves this summer.

The week-long natural disaster left the Yangtze river at historically low levels and caused power rationing in some parts of the industry-rich river basin, with Sichuan province being the most significantly impacted region in the country.

Unlike most Chinese provinces, Sichuan utilises hydropower to generate 80% of its power.

The power crisis in Sichuan has reinforced Beijing’s determination to ensure energy security by unleashing additional coal capacity. Against this backdrop, China’s coal production jumped 8.1% YoY last month, with natural gas increasing by 6.3% compared to August 2021.

Shanxi province, which accounts for around one-third of China’s total coal production, is planning to increase its annual coal production by 107 million tonnes this year, according to the provincial government.

On the other hand, the world’s biggest emitter is also planning to add more nuclear capacity to stabilise the power supply.

The State Council recently approved the construction of two nuclear plants in Fujian and Guandong, after three nuclear power projects were given green light in April this year.

China, which had a year-long moratorium on new nuclear projects after the Fukushima disaster, has at least 52 reactors under construction or planned, according to the World Nuclear Association.

By Chia-Erh Kuo – chia-erh@carbon-pulse.com