China Electricity

In 2007, China’s electricity industry witnessed continuous growth in demand. Due to this, the industry’s annual revenues peaked at $220.7 billion. The increased demand was met by the installation of new generation capacities. Currently, the Chinese electricity industry is growing at an annual rate of 11.8%, which is lower than the 13% yearly growth of electricity consumption.

China Electricity: Supply Trends

In 2007, the Chinese electricity industry supplied around 3.256 trillion kilowatt hours (Kwh). Around two-thirds of this was generated at coal-based power plants. Power stations fueled by renewable sources of energy also contributed to the electricity industry. Moreover, nine nuclear power units played a key role in overall electricity production. According to the China Electricity council, the country had an installed capacity of 710 GW by 2007.

Electricity production in China was dominated by Huaneng Group, Datang Corporation, Guodian Corporation, Huadian Corporation and China Power Investment Corporation.

China Electricity: Consumption Trends

In 2007, China’s total consumption of electricity was pegged at 3.271 trillion kWh. During the first three quarters, 1.8 trillion kWh was consumed by the industrial sector. There was a 10.4% and 18.42% rise in the consumption level of light and heavy industries. In China, a 1% rate of growth in the industrial sector increases the overall electricity demand by 0.85%. At this pace, China’s industrial sector will continue to be a major stakeholder in the country’s electricity consumption mix. For 2007, China’s per capita electricity consumption was estimated at 2,444 kWh, which was slightly less than the per capita electricity production of 2,433 kWh per capita. The country also exported 14.56 billion kWh in 2007.

China Electricity: Prospects

Japan’s Institute of Energy Economics estimates China’s per capita and average daily electricity consumption at 2130 kWh and 258 kWh, respectively, for 2010. To meet the soaring demand for energy, the Chinese government aspires to take the following measures:

Generation Sector:

• Emphasis on the development of hydropower projects
• Enhancement of nuclear power units
• Introduction of power generation units fueled by natural gas
• Proactive action for the incorporation of renewable sources of energy
• Improvement in the efficiency of energy utilization

Network Sector:

• Construction of a nationwide integrated grid by interlinking ‘West-East Power Transmission’ and ‘South-North Power Transmission’
• Upgrading of region-specific transmission and distribution capacities

Rising coal prices poses a grave threat to China’s electricity industry. An increase of 10% in coal prices increases the fuel bills of energy companies by 40 billion yuan. Electricity producers have already expressed their concern over rising coal costs. They are proposing an increment in the electricity price paid by end-users.