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China Second-Half Power Demand Growth May Slow to 5% (Update1)
Jul 26,2010 15:56CST
data analysis

SHANGHAI, July 26 -- China's electricity demand growth may slow to about 5 percent in the second half from the first amid curbs on energy-intensive and polluting industries, cutting investment in power plants, the China Electricity Council said.

Electricity consumption may rise about 12 percent to 4.1 trillion kilowatt-hours this year, the council said in a statement on its website today. Demand gained 22 percent in the first six months on increased factory use.

Economic growth eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, restraining energy demand growth. Chinese investment in power stations and grids will reach about 660 billion yuan ($97 billion) this year, less than 2009, the council said, without giving a comparative number.

Second-half power supply and demand will be balanced generally with surplus in some regions and tightness in others, depending on coal supply and weather conditions, the state- backed council said. China uses coal as fuel in about 80 percent of its power plants.

Power-station coal prices may stabilize at high levels in the second half on constrained supply, the council said. The government should improve the system linking coal and electricity prices to help stem losses at power producers, according to the council.

Stemming Losses

Coal prices may rise from current levels and thermal-power plants will continue to face operational difficulties, it said. Chinese coal prices at Qinhuangdao, the nation's largest port for the fuel, have gained 35 percent since last year's low in March. Use of thermal coal may exceed 1.7 billion metric tons this year, according to the council.

The council said 43.4 percent of thermal-power producers posted losses in the first five months, 3.5 percentage points higher than a year earlier, citing data from the National Bureau of Statistics.

China has frozen electricity prices to limit their impact on inflation. The country has a system under which it raises power tariffs when coal costs increase by more than 5 percent within a six-month period.


electric power

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