Charts of the Day: Power Consumption Slowdown Hints at Economic Woes

New figures show China’s electricity consumption in the first 11 months of last year grew at around half the pace that it did during the same period in 2018.

Electricity consumption is seen as a useful alternative measure of a country’s economic development, and the news has fueled renewed concern over the real state of China’s economy, even amid more positive signs that cleaner sources are making up a larger proportion of the country’s energy mix.

China consumed a record 6,514 terawatt-hours (TWh) of electricity for the year through November, 4.5% more than for the same period in 2018. But the growth rate was down 4 percentage points from 2018.

About two-thirds of China’s total power consumption or 4,333 TWh was used by industry, a year-on-year increase of 2.9%, but the growth rate dropped by more than half. The amount used in manufacturing grew 3% to 3,272 TWh, down 4.2 percentage points from the same period in 2018.

The decline reflects China’s broader economic downturn. According to official figures, China’s GDP growth fell to 6.2% in the first three quarters of 2019, the slowest pace in almost three decades. IMF Managing Director Kristalina Georgieva forecast this year’s growth at 6% — right at the bottom of the 6% to 6.5% range Beijing set for the year.

Cleaner sources

While the overwhelming share of China’s power output comes from dirty sources like coal, growth in output from cleaner ones like hydropower, wind and nuclear has shot up from a low base, perhaps reflecting efforts over the past few years to shift to a more environmental friendly economy.

Electricity generated by nuclear power boomed 215% from 100 TWh in the first 11 months of 2013 to 315 TWh for the year through November, while wind power spiked 191% from 125 TWh to 364 TWh. Hydropower produced 51.8% more electricity over the same period.

Thermal power — made from polluting fossil fuels like coal and natural gas — remains China’s main source of electricity. Output from these sources increased 22% from the first 11 months of 2013 to the same period in 2019.

Fossil fuels produced 4,652 TWh of power in the first 11 months of 2019, up 1.2% year-on-year, and 4.6 percentage points lower than the comparable period of the previous year.

Beijing is ramping up the use of cleaner energy, and encouraging development of renewable sources like solar power and biogas, in a bid to tackle severe air pollution in the country, and meet a target it set to become a fully developed country with no carbon emissions by mid-century.

Contact reporter Yutong Lu (yutonglu@caixin.com)