Current Situation of China's Electricity Market

 

(1) General situation of electric power production

 

_1. The growth of power generation has slowed down significantly. In recent years, China's power generation has maintained a high growth rate. From 2007 to 2011, the power generation increased from 3255.9 billion kWh to 4721.7 billion kWh, an increase of about 45%, with an average annual growth rate of 11.1%. However, by 2012, the growth rate dropped rapidly to 4.7%, and further to 3.2% in 2014. Although it rebounded in 2013, the growth rate was 7.5%. The overall growth trend has shown a marked slowdown. In 2014, the national power generation capacity was 5463.8 billion kWh, of which hydropower increased 18% year on year, nuclear power increased 18.89% year on year, and thermal power decreased 0.4% year on year. This is due to the reduction of thermal power consumption caused by the influence of temperature. If the temperature factor is eliminated, it should be on the increase in 2015. Although the growth rate of China's power generation has slowed down in recent years, according to the forecast of EIA, IEA and IEEJ, the average growth rate of world power generation is 2.2%-2.3% by 2035, and the growth rate of China's power generation is still much higher than that.

 

_2. The capacity of power generation equipment is growing too fast, and the problem of over-investment is more prominent. In 2012, China added the largest new installed capacity, 84.23 million kW, up 7.93% year-on-year, 9.25% year-on-year in 2013 and 8.7% year-on-year in 2014. In 2012, the average utilization hours of power generation equipment in 6000 kW and above power plants nationwide were 4572 hours, 158 hours lower than in 2011, 4511 hours in 2013, 61 hours lower than the same period last year, 4286 hours in 2014 and 225 hours lower than the same period last year. For three consecutive years, the installed capacity of power generation continues to grow at a high rate, while the average utilization hours of power generation equipment decrease year by year, reflecting that the investment speed of power generation equipment is far faster than the effective utilization rate of the overall power generation equipment.

 

(2) General situation of electricity market

 

_1. There is no fundamental improvement in the irrational structure of industrial power consumption. China's secondary industry consumes about 74% of its electricity for three consecutive years, of which heavy industry consumes about 60% of its electricity for three consecutive years. After the annual growth rate of tertiary industry and residential power consumption exceeded 10% in 2012, it declined somewhat in 2013 and declined sharply in 2014. The unreasonable electricity structure has not changed. In 2014, the average temperature of the whole country in August was 0.2 degrees lower than that in the same period of the year, 1.5 degrees lower than that in the same period of last year, and the electricity consumption of enterprises and residents decreased significantly. The electricity consumption of the whole country increased by 3.8% compared with the same period of last year, with 5523.3 billion kWh. Among them, the electricity consumption of the primary industry decreased by 0.2% compared with the same period of last year, while that of the second industry increased by 3.7% compared with the same period of last year. Third industry 666 billion kWh, an increase of 6.4%, urban and rural residents living 692.8 billion kWh, an increase of 2.2%, heavy industry electricity consumption of 3327.2 billion kWh, an increase of 3.6%.

 

_. In the field of high energy consumption, non-ferrous metals and chemical industry have maintained a sustained and high growth trend in power consumption, while the proportion of ferrous metals in power consumption has not significantly decreased, while the building materials sector has kept rising for two consecutive years after a slight decline in 2012, which shows that the overall energy-saving effect in the field of high energy consumption is not good. From January to November 2014, the consumption of ferrous metals, non-ferrous metals, chemicals and building materials in the four high energy-consuming industries was 4022, 2884, 2856 and 235.9 billion kWh, respectively, with annual growth rates of -0.9%, 4.5%, 3.4% and 5.1% respectively.

 

_2. Power supply and demand are balanced in general and partly short of electricity. The fastest growing area of social electricity consumption is mainly located in the northwest. From January to November 2014, the provinces whose electricity consumption increased more than the national average (3.7%) were Xinjiang (13.4%), Inner Mongolia (10.7%), Fujian (9.3%), Hainan (8.9%), Guangdong (8.7%), Jiangxi (7.3%), Qinghai (7.0%), Chongqing (6.7%), Guangxi (5.7%), Shaanxi (5.6%), Yunnan (5.3%), Ningxia (4.8%) and Guizhou (4.2%). Xinjiang, Qinghai, Yunnan, Hainan, Shaanxi and Inner Mongolia have maintained three consecutive years of high growth. Tibet, Anhui, Gansu and Jiangsu have maintained two years of high growth, but in 2014 there has been a substantial decline. Fujian, Chongqing, Ningxia and Jiangxi have increased their growth rate in recent two years.

 

_. The regional growth trend of social electricity consumption is basically consistent with that of regional electricity load. From January to November 2014, the highest power load in Northwest China grew fastest, 5.7%, followed by that in North China, which grew by 3.0%. The highest power load in East, Central and Northeast China grew relatively slowly, increasing by 1.9%, 0.9% and 1.4% respectively.

 

_Under the condition of ensuring the basic balance of power supply in the whole country, there is a shortage of electricity in some areas, but most of these areas are not high-growth areas of electricity consumption, mainly affected by the shortage of regional power resources and temperature, and lack of foreign aid. From January to November 2014, the power gap was smaller than that of last year, with a total of 5.4 million kilowatts, including 360 million kilowatts in Tianjin, 239 million kilowatts in Hebei South Power Grid, 870 million kilowatts in northern Hebei, 36 million kilowatts in Shandong, 112 million kilowatts in Jiangsu, 200,000 kilowatts in Anhui, 130,000 kilowatts in Fujian and 90,000 kilowatts in Henan. Million kilowatt, 1.16 million kilowatt in Shaanxi and 85 million kilowatt in Tibet.

 

(3) Low level of international cooperation

 

At present, the interconnection of transnational power grids has become a trend of development. Many countries have established interconnected power grids to make full use of global energy, especially clean energy. However, China has made very slow progress in the field of international cooperation in power industry. From January to November 2014, the total import and export electricity of the whole country amounted to 23.03 billion kilowatt-hours, accounting for only 0.4% of the national electricity consumption of 501.16 billion kilowatt-hours in the same period, a decrease of 7.2% compared with the same period last year. Among them, the imported electricity consumption was 5.56 billion kWh, which was 13.6% lower than that of the previous year; the export electricity consumption was 17.47 billion kWh, which was 5.0% lower than that of the previous year. Hong Kong (60%), Macao (22%) and China (22%) ranked the top three in the cumulative electricity exports.