CEC Expects an Overall Better Electricity Consumption in 2016 than 2015

China Electricity Council (CEC) recently said it the expects total electricity consumption throughout 2016 will grow approximately 2.5% year on year, considering the factors such as macroeconomic situation, lower price of commercial and industrial electricity utilization, direct trading by power users that leads to reduced costs of production, and alternative energy, which will be overall better than 2015. However, coal and electric power enterprise benefits will further shrink, facing greater challenges in the development.

Data show that in the first half of this year, total electricity consumption grew 2.7% year on year, with the growth rate up 1.4 percentage points than the same period of last year, suggesting an improved electricity consumption than the previous year. The newly-added installed capacity of power generation hit a historical high for the same period over the years. By the end of June, the power plants with 6000 kilowatts and above have reached 1.52 billion kilowatts of installed capacity in power generation, a year-on-year increase of 11.3% that exceeded the total electricity consumption growth rate during the same period by 8.6 percentage points, but the electricity supply in some areas has the problem of further intensified excess capacity. The electricity volume generated by non-fossil energy sustained a rapid growth, but the electricity volume generated by thermal power continued a negative growth, and the equipment utilization hours still fell. Generally speaking, the national electricity supply and demand was loose, with excess capacity in some areas.

Liang Weilie, Deputy Director of Planning and Development Department at CEC, said based on a preliminary forecast, the growth rate of the total electricity consumption throughout 2016 will rise by 1 percentage point or even higher due to temperature factor, according to the actual influence by temperature in the first half of the year on the electricity consumption, and the forecast made by the meteorological department that in the peak time period of this year summer, most areas across the country will have a higher temperature. So the forecast for the total electricity consumption growth rate is raised by 1 percentage point compared with the forecast made earlier this year. In particular, the total electricity consumption growth rate in the second half of the year will overall stay the same as the first half of the year.

Reporters learned that this year, the national infrastructure construction is expected to bring about 120 million kilowatts of newly-added installed power generation capacity, including about 70 million kilowatts of installed non-fossil energy power generation capacity, and 50 million kilowatts of coal power generation capacity. It is estimated that by the end of 2016, the national installed capacity of power generation will reach 1.64 billion kilowatts, growing about 7.8% year on year, where 600 million kilowatts of electricity will be generated by non-fossil energy, and the proportion in the total installed capacity will rise to about 36.5%.

"In general, the country has an electricity supply capacity more than needed this year, with some areas facing a surplus", said Liang Weilie, who expects an excessive power supply in the northeast and northwest area, an overall balanced power supply and demand in northern area, an extra power supply in the western Inner Mongolia and Shanxi, an overall loose power supply in the central, eastern and southern area, and a surplus in some provinces in the power supply. It is estimated that the power generation equipment utilization hours will reach about 3750 hours for the whole year, where the thermal power equipment utilization hours will drop to about 4050 hours, decreasing approximately 300 hours compared with last year.