With an increase of 5 percent in 2016, Chinese electricity consumption rose to 5920 TWh, of which 25% was supplied by renewables. By far the most electricity (4211 TWh) was consumed by China’s secondary industry. Households roughly consumed 800 TWh, the remainder is shared by primary and tertiary industries. The largest growth rates in power consumption with each more than 10 percent can however be attributed to tertiary industries as well as urban and rural households (Source: National Energy Administration).
The average utilization of power generators declined again, as it has done for years now, laying bare the overcapacities in the Chinese power sector. In 2016, thermal power full load hours went down on average by 200 hours to 4165 hours, even lower than the lowest utilization level in decades in 2015.
Addition of new generating capacity amounted to 125 GW, ending 2016 with 1646 GW of installed capacity. With a growth of more than 80 percent, the capacity additions of solar power outstripped all other generators, except of coal. Figure 1 (own representation) depicts the installed power generating capacity in China along with the additions in 2016 in GW, as well as the year-on-year capacity additions in percent (Source: China Electricity Council).
Clearly, the Chinese power system is still being dominated by coal. However the additions of solar (a total of 77 GW installed by the end of 2016) and wind power solar (a total of 149 GW installed by the end of 2016) in recent years led to an increasingly higher share of renewables in installed capacity.
Such an analysis however has to be complemented with the actual share in power generation from different sources. Not surprisingly, the huge additions of solar and wind capacity are also reflected in an increase in generation. In 2016, wind turbines generated 241 TWh of electricity, an increase of 30 percent compared to 2015 levels. Electricity generation from solar power grew by 72 percent with a cumulative generation of 66 TWh in 2016.
The third-strongest sector was nuclear power, which generated 24 percent more electricity than last year, reaching 213 TWh.
Even though with 5 percent, the growth rate of thermal capacity was not impressive, the year-on-year growth of coal and gas-fired generation in terms of electricity rivals that of renewables as can be inferred from figure 2 (Source: China Energy Portal).
In total, growth in thermal fossil-fuel based power generation was 111 TWh, while the combined new electricity generation from hydro, wind and solar power amounted to 153 TWh in 2016. This new electricity generation by renewables in 2016 in China is almost equal to the electricity generation by all German renewables in 2016 with 186 TWh.
The incredible growth of renewables in China is certainly impressive. The challenges are however also daunting. Transforming a power system with 1000 GW of thermal generators, most of which are coal-fired, will be a huge effort. In addition coal-fired power plants are arguably one of the most important sources for heating many of China’s northern mega-cities during the winter months. A district heating infrastructure – huge compared to the European one – has been built up and millions have been invested there as well (Source: ThinkChina). The reliance of the Chinese power sector on coal is and will therefore still be huge for years to come.
And even though renewables, especially hydro power, play a pivotal role in the generation mix, the replacement of coal by renewables, such as wind and PV, or low-emission technologies, such as nuclear or gas has yet to manifest itself. More than 65 percent of all electricity in 2016 was generated by coal-fired power plants, as figure 3 shows (Source: China Energy Portal).
When compared to the 4 percent share of wind power or 1 percent by solar – despite of several years of strong growth in both technologies – the challenge becomes obvious. Most renewable generation is still hydro power, which at least might be a source of flexibility in the power system and thus could enable the integration of more fluctuating renewable generation from wind and PV.
The author is an expert analyst at Energy Brainpool, an independent market specialist in Berlin focusing on electricity and energy trading in Europe. The expertise of Energy Brainpool encompasses the analysis, forecasting and simulation of energy markets and prices, researched and scenario-based studies, and providing individual consulting services as well as training and expert seminars for the energy sector.
The article first appeared on CEEN (Chinese European Energy News).