China's peak power load hits record high amid heat wave, economic growth: NEA

China's peak power load hit a new record of 1,465 GW on July 4, driven by extreme heat and economic growth, the National Energy Administration said on its official WeChat account.

This figure represents an increase of approximately 200 GW from the end of June and nearly 150 GW from the same period last year.

China's peak power load has consistently set new records in recent years, with the previous daily peak recorded at 1,451 GW in 2024, according to the NEA.

The power grids in six provinces and regions -- Mengdong, Jiangsu, Anhui, Shandong, Henan, and Hubei -- have also registered new highs in power load this summer, the NEA said.

The NEA, citing the China Meteorological Administration, forecast that high temperatures would persist in northern, central and eastern regions from July 4-10, with some areas potentially reaching or exceeding historical extreme temperatures for the time of year.

"It is expected that power load in eastern and central China will continue to rise, further driving national power load growth," the NEA said.

Despite the surge in demand, the NEA emphasized that the country's total power supply remained generally stable.

"We will closely monitor weather changes as well as the power supply and demand situation, guiding local governments and power companies to ensure stable and adequate power generation. Additionally, we will work to balance power surpluses and shortages across provinces and regions to fully meet summer power demand," it added.

Heat wave, economic growth

Daily maximum temperatures in eastern, southern, central and northern regions were projected to range from 35-39 C between June 30 and July 5, with some areas exceeding 40 Celsius, according to the CMA.

On July 7, the CMA continued issuing high-temperature alerts, warning that temperatures in some eastern, central, northern, and southwestern regions would surpass 35 C, with the highest temperatures in certain areas exceeding 40 Cover the next two days.

China's industrial sector has also demonstrated unexpected resilience despite ongoing US-China tariff tensions, industry sources said.

In May, China's value-added industrial output grew by 5.8% year over year. The manufacturing sector saw a 6.2% year-over-year increase in value-added output, with equipment manufacturing and high-tech manufacturing rising by 9% and 8.6%, respectively, according to the latest data from the National Bureau of Statistics.

This growth has partially defied trade dispute headwinds, as the production and exports of some high-value products, such as electronics and high-tech goods, have not been significantly impacted by US tariffs, industry sources noted.

China's peak power demand this summer likely hit a record of 1,550 GW, up by around 100 GW from last year, according to the National Development and Reform Commission.

Gas-fired generation

"I believe gas demand has increased as a result of heat wave. Our factory started consuming gas for power generation on a full-load basis," said a source from a petrochemicals factory in eastern China. The factory typically generates its own electricity only to sustain production when the local grid's supply is tight, the source added.

Yet despite the growth, gas-fired power -- once regarded as a "clean transition fuel" -- is still playing a diminished role in the total power supply this year, according to industry sources.

"Power demand has increased, however, gas-fired power generation has not been significantly boosted due to sufficient supply from other generation fuels, particularly the availability of solar power during sunny days," another source in eastern China noted.

"We are currently not considering purchasing spot LNG to supply gas-fired power plants, as the existing pricing mechanism does not incentivize higher operating rates for gas power, unless they are required to ensure supply," the source added.

According to data from S&P Global Energy, China's gas-fired power generation utilization hours were approximately 848 hours over the January-May period, a year-over-year decrease of 62 hours.

China's new gas-fired power generation capacity increased by 18 GW to 143.67 GW in 2024, and it is expected to increase by 22 GW this year, Energy data showed.

However, due to uncompetitive power generation costs and the sharp increase in renewable power supply, natural gas power generation may become a marginal "last resort" this year, industry sources said.

By the end of May, installed capacity for solar and wind power generation increased by 56.9% and 23.1% year over year to 1,080 GW and 570 GW, respectively. Together, these sources account for 45.7% of the country's total installed power capacity, surpassing that of thermal power.