The Power consumption in China reached 7,202,536 GWh in 2020
The indicator recorded a historical growth at a CAGR of 5.95% between 2017 to 2020
Why did China’s Power consumption grow amid COVID-19?
From 2000 to 2020, electricity consumption grew rapidly at a high-single digit CAGR. The COVID-19 pandemic did not have much impact on the country’s power consumption. Power consumption grew by mid-single-digit percentage in 2020 as compared to 2019 as China did not impose severe lockdowns like other countries to curb the spread of COVID-19. By 2027, the annual power consumption is estimated to grow at a mid-single-digit CAGR from 2020 to 2027.
Electricity consumption is the sum of power generated, plus imports, minus exports and Transmission and Distribution (T&D) losses. It is measured in GWh.
Supply Security
The electricity consumption in China grew at a tremendous rate from 2000 to 2011. From 2012 onwards, consumption is growing at a reduced rate, owing to the government’s efforts to rein it in. Generation from hydropower and renewable energy sources has increased which has led to idle generation capacity in many coal power plants and has seen the government banning the construction of new coal-based capacity in the key economic regions of Hong Kong, Shanghai, and Beijing.
China is the world’s largest consumer of coal. Coal power plants are the major source of power generation in the country, holding a mid-double-digit percentage share of total power generation in 2020. This is due to the availability of cheap imported coal from countries like Indonesia and Australia. The government is trying to reduce its dependence on coal-based power generation due to pollution concerns, and to reduce import dependency.
China’s shift in focus from heavy industries to service and high-tech industries, as well as towards sustainable development means that demand for coal will continue to fall in the future. Nevertheless, coal will continue to be the dominant source of power generation during the forecast period, its share reaching mid-double-digit percentage in total power generation by 2030. High dependence on a single source for power generation poses an energy security threat to the country.
Challenges
A further challenge lies in the centralized planning process. The power sector faced a severe power-supply shortage in 2012. In response, the government rolled out a capacity-augmentation process, which led to the rate of growth in capacity outpacing consumption. This may lead to a supply glut and idle plant capacity. The process of increasing capacity in waves could be replaced by a decentralized approach, allowing for more flexible decision-making.
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