China’s power generation in October rose to its highest level for the month in nearly three decades, statistics bureau data showed on Friday, boosted by atypical weather and a rise in industrial power consumption.

Power generation was 800.2 billion kilowatt-hours, up 7.9% from a year earlier and the highest for October since at least 1998.

“This surge resulted from a low base effect from last year, a strong rebound in industrial activity, and unusual weather patterns,” said Han Bing, senior power and renewables analyst for S&P Global Energy.

THERMAL, HYDROPOWER GENERATION UP

Northern China was blasted by multiple cold waves during the month while southern China experienced a warmer than usual autumn, leading to more electricity demand for both heating and cooling, Han said.

There was also a surge in power consumption in the high-tech manufacturing and energy-intensive sectors. The EV charging, automotive and electrical equipment sectors led the charge with 45.2%, 17.5% and 16.6% power consumption growth, respectively, Han said.

The jump in electricity demand led to a 7.3% increase in fossil-fuelled power generation, or thermal power output, which was at 513.8 billion kWh. That was also the highest thermal power output for October since at least the 1990s.

China’s thermal power output is mostly from coal with a small amount from natural gas.

“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 fulfilling the coal contracts,” Lauri Myllyvirta, co-founder of the Helsinki-based Centre for Research on Energy and Clean Air, said in a LinkedIn post, but added that further assessment was needed as more detailed data is released.

Weaker renewable output was also a factor, with solar irradiance down by over 15% in the northeast and northwest, Han said.
Thermal generation was, however, down month-on-month from 517.5 billion kWh in September and down 0.4% as a whole over the first 10 months of the year.

Hydropower output in October jumped 28.2% from a year earlier. But S&P forecasts weaker hydropower output in the coming months, with precipitation 10-30% below historical averages. That would further boost thermal generation.

The statistics bureau data reflects output from industrial enterprises with revenue of over 20 million yuan ($2.8 million).

They tend to understate generation, particularly from solar operations because of the revenue requirement, so the actual increase in power generation may have been higher.
Source: Reuters