By Colleen Howe
BEIJING (Reuters) – China’s mostly coal-powered thermal generation ticked up 1.5% in 2024, official data showed on Friday, defying expectations that coal generation was peaking, although growth slowed to the lowest in nine years excluding the years of the COVID-19 pandemic.
The data highlighted the challenges in phasing out coal-fired power while supplying China’s energy-hungry industries and advancing the electrification of its economy.
Power sector emissions are considered key to China’s decarbonisation because of Beijing’s electrification push, typified by its shift to electric vehicles.
Thermal power generation, mostly fuelled by coal while natural gas-fired power plants contribute a small portion, was 6.34 trillion kilowatt-hours (kWh) last year, up 1.5% from 2023, according to the National Bureau of Statistics.
Peng Chengyao, director for China power and renewables at S&P Global Commodity Insights, said thermal generation exceeded the consultancy’s outlook at the beginning of the year because of higher-than-expected growth in power demand. S&P had initially expected renewables to cover most or all of the increase in power demand in 2024.
The IEA in its 2023 coal report had also forecast a drop in China’s coal consumption in 2024 due to significant increases in hydropower, solar and wind.
But according to Lauri Myllyvirta, senior fellow at the Asia Society Policy Institute, “power demand growth in 2023 and 2024 was far above historical norms, significantly outpacing GDP growth, due to high reliance on energy intensive industries to drive growth.” He said that a rebound in residential and service sector demand following China’s emergence from COVID pandemic shutdowns also contributed to that growth.
Myllyvirta pointed out, however, that after a 11% spike in January-February, coal-fired power stayed flat in March-November.
“So looking at the full-year numbers masks a very significant breakpoint.”
For December alone, thermal power output fell 2.6% on the year to 827 billion kWh.
Analysts also pinned full-year thermal power growth on weaker-than-expected hydropower output during a scorching summer that pushed up power demand.
Hydropower, China’s second-largest power source, grew at its fastest in a decade, but that came off a low base as the sector recovered from a punishing drought in 2023.
“Around September, hydropower had a really sharp drop off … It was just a little better than the severe drought conditions of the year before,” said David Fishman, senior manager at consultancy the Lantau Group.
“That, combined with an extended late summer heat wave, meant that renewables were not enough to meet that incremental demand.”
Last year was the warmest ever for China since record-keeping began six decades ago, meteorological data showed.
Hydropower output in 2024 rose 10.7% to 1.27 trillion kWh, the data showed.
Overall power demand grew 4.6%, according to the statistics bureau’s data.
That data covers power generation from industrial enterprises with annual revenue of at least 20 million yuan ($2.8 million), leaving out some small-scale wind and solar sources. Estimates of power generation based on data from China’s National Energy Administration, due to be released later this month, are expected to show higher power demand growth than in the statistics bureau’s data.
For 2025, Greenpeace analysts said renewable power could meet all of China’s new power demand growth. That would “pave the way for China’s power sector to achieve peak emissions by 2025”, according to Greenpeace East Asia Beijing-based project leader Gao Yuhe.
(Reporting by Colleen Howe; Editing by Edmund Klamann and Tomasz Janowski)
