Slow growth in China continues to drive global emissions growth towards a flatline, leaving the gap open for renewables to exploit. According to the China Electricity Council (CEC), electricity generation grew 5% in 2016 to 5920 TWh with the combined contribution of new capacity in hydro, wind, and solar eclipsing the contribution of new capacity in coal.
However, for China’s electricity generation to have grown by a full 5% last year to 5920 TWh, it will require a downward revision in 2015’s generation total from 5811 TWh (the latest according to BP Statistical Review) to 5640 TWh. Yes, China’s energy data has become, in recent years, notoriously volatile. But if we combine the existing data set from BP with the latest CEC data, we find that China’s electricity generation grew a more reasonable 1.9% last year—a figure more in line with overall, economic readings.
For China to have achieved 5% growth in power generation last year, the downward revision to 2015’s generation will be large enough to record a significant decline in growth, from the previous year (2014). The implication is pretty clear: volatility in the baseline at this juncture does not change the overall picture, that China’s economy—which runs mainly on electricity—is moving along at a conventional rate.
But there’s a final data point buried in the recent data release from CEC, that strengthens the slow(er) growth thesis in China. The utilization rate of China’s thermal power generation capacity (coal, natural gas, and oil) actually fell, to the lowest level since 1964. This confirms a broader, more important trend that we’ve known about China for some years now: it’s powergrid system is a sprawling, stuffed with coal plants it no longer needs, and has already reached overcapacity.
–Gregor Macdonald
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