Chinese Power Sector Coal Consumption Still Slightly Up For 2024 YTD...Is There Enough Time?

By the end of August 2024, China's thermal power generation for the year to date had risen around 1% year-on-year. Including September data (which will shall see soon) we have only a few months left to get into negative territory and make me not a liar (I've been saying that Chinese coal consumption will drop in 2024 for about a year now, and I don't want to be a liar).

At the end of July, the year-on-year rise for Jan-July was just 0.5%, which means the strong thermal power generation growth in August brought us further from the goal of capping coal consumption in 2024 (for the purposes of this discussion, I'm treating thermal power data as coal data, because Chinese thermal generation is overwhelmingly coal).

Here's how the individual provinces are doing so far this year:

Many provinces are using less coal than they did last year, some significantly so. But still, quite a few provinces have seen their coal consumption rise over the first 8 months of 2024, also some very significantly. Actually, it's about half and half.

Now of course, knowing the percentage change YoY is not enough - we need to know what kind of base we were working with. Qinghai's -27% YoY looks huge, but how impactful is that really?

To assess that, we need to look at the actual change YoY in GWh, not percentage points:

On a GWh basis, a different picture emerges. Qinghai's -27% YoY is not actually that meaningful at all, since it was against a very low base (Qinghai just doesn't have that much coal generation to start with). Guangxi and Hunan's YoY change, however, are much more meaningful, translating well from percentage points to absolute change in GWh.

These are provinces with some considerable hydropower resources, and hydropower had a very strong recovery in 2024 from the 2023 drought conditions. Indeed, we can see hydropower performance has been up strongly YoY pretty much across the board, allowing thermal generation to recede in those related provinces.

At the same time, we can see clearly how +7.3% thermal generation in Inner Mongolia is absolutely huge, translating through to 28 TWh of incremental thermal power generation in the province. By focusing on the top section of my chart, it's clear to see which provinces are letting down the team and making it hard to cap coal consumption this year: Inner Mongolia, Shaanxi, Jiangsu, Henan...

These data really highlight how this effort is a province-level battle.

Inner Mongolia is particularly interesting this year, in that ALL of its power generation is up. Thermal power generation isn't rising because another generation type is faltering; Inner Mongolia is just using more of EVERYTHING.

Inner Mongolia's power demand over 2024 has risen a stunning 11% YoY (against what was already a high base). Something wild is going on with power demand over there, and they need all the generation they can get, from every source. New data centers going in?

I'll be keeping a close eye on these provincial numbers as we approach the end of the year. +1% thermal power consumption for the country would be both very close and very far, a heartbreaking way to end the year (and make me a liar).

While it's also possible that 2024 coal consumption could rise very marginally in the power sector and still decline for the whole nation, thanks to much lower coal consumption in other industries (particularly cement) I'd prefer to see a decline in the power sector as well. We'll see!

That's all for this time. If you enjoyed this content, please give me a follow, and also check out The Lantau Group, a specialist consultancy focused on the Asia-Pacific energy sector. I'm based in The Lantau Group's Shanghai office, where I help companies make crucial decisions about their energy strategy in China, including power tariff forecasts, budget forecasts, and sustainability planning for power customers, as well as transaction/commercial support for power infrastructure developers, lenders and investors.