Weak economy dampens industrial power growth in China

Despite an increase in total power consumption, industrial electricity use in China remains weak.

Total electrical power used in May rose 5.7% from April, but rising coal costs and a weak economy have dampened industrial electricity growth.

The National Energy Administration said total consumption reached 406.1 billion kilowatt-hours (kWh) in May, with industrial utilisation at 362.3 billion kWh, up 4.6% compared to May last year.

Despite this, monthly power consumption remains less than half that in 2011. April saw the slowest rate of increase in a non-holiday month for nearly three years.

From January to May this year, industrial usage reached 1.7 trillion kWh, up 4.6% year-on-year, a large improvement from the 2.1% growth seen from January to April.

The National Development and Reform Commission expects power shortages this summer ranging from 16 to 18 gigawatts, which is much lower than the 30-40 GW deficit last year. It said the overall supply gap has narrowed compared to previous years and will be less than 3% of the total load.

China regularly faces power shortages during peak consumption periods as a result of rising coal prices; coal supply bottlenecks and limited transmission capacity.