China's power grid forecast to set new records for peak loads in coming weeks, says government

The volume of electricity carried on China's power grid is expected to hit fresh record highs until mid-August, but the government had prepared for the country's peak power season with the highest coal inventories in history, officials said at a press conference July 27.

The peak power load in China hit record highs multiple times in the second half of July due to unusually high temperatures and strong demand. It touched 1,260 GW on July 15, and daily power generation reached 28.5 TWh on the day same day, said He Yang, director of the power department of the National Energy Administration, or NEA, in response to queries.

He said the period from late July to early August is usually the time when China's electricity load is the highest, according to a transcript published late July 27. Extreme heat has been sweeping across China since June with peak power loads hitting record highs in many provinces including Guangdong, Zhejiang, Jiangxi, Jiangsu, Henan, Shandong and Ningxia.

"There's a trend that the growth of peak power load is much higher than that of total power consumption, and the daily difference between the highest load and the lowest load continues to expand," He said.

He said it was necessary to guide users to stagger peak and trough power consumption, but the government will hold the line and not cut power. China will add 180 GW of new power capacity over July 2021 to end-2022, with 70 GW being added in the first half of 2022, according to He.

Coal stocks at record high

In order to ensure power supply, China has taken measures to boost fuel supply, especially coal, and thermal coal inventory has reached the highest level in history, He said.

China's thermal coal inventory at coal-fired power plants exceeded 170 million mt at end June, a surge of 51.7% year on year, according to the NEA.

"We have assigned coal production tasks to the coal-producing provinces and signed letters of responsibility for ensuring coal supply with them," He said.

The NEA this year approved coal mining projects with advanced production capacity of 37.7 million mt/year, adjusted construction to increase production by 9 million mt/year and accelerated production trials for 60 million mt/year, according to He.

China is also on track to inject natural gas into its underground gas storage, which will be filled up before the heating season, said Zhang Jianhua, director of the NEA.

The country's natural gas storage capacity has doubled since construction was accelerated in 2018, Zhang noted, adding that he expects gas storage capacity to double again from the 2021 level by 2025.

At the same time, China will ensure stable operations of its four major oil and gas import channels -- the northeast, northwest, southwest and the sea, Zhang said, adding that the country imported a total 250 million mt of crude oil, 74.4 Bcm of natural gas, 115 million mt of coal and 2.96 TWh of electricity in the first six months of 2022.

Hike in clean energy use

China has shifted its dual control targets to constrain total carbon emissions and carbon intensity from curbing energy consumption and energy intensity this year, which means fossil-fuel based energy will be capped while the use of clean energy will not.

With the construction of large-scale wind power, solar farms and the development of hydro and nuclear power projects, the proportion of China's non-fossil fuel energy consumption is expected to reach about 60% by 2025, said Li Fulong, director of the NEA's development planning department.

China's investment in energy projects increased 15.9% year on year in H1 2022, of which investment in non-fossil energy accounted for about 87% of the projects that have begun construction, according to Li.

Installed capacity of non-fossil fuel power generation accounted for about 83% of total new capacity in H1, installed renewables generation capacity exceeded 1.1 billion kilowatts, and hydropower, wind power and solar power increased by 20.3%, 7.8% and 13.5% year on year respectively, Li said.

In addition, the NEA has approved the construction of six nuclear power units this year, director Zhang Jianhua said, adding that he expects the proportion of renewable energy in total energy consumption will reach around 18% by 2025.

"We expect that the proportion of non-fossil energy consumption in total energy consumption will continue to grow at an average rate of 1 percentage point per year, and we have the ability and confidence to achieve the goal of peaking carbon by 2030," Zhang said.