Summary of Key Points
In the first half of this year, national electricity consumption exhibited characteristics of "increased total volume, improved structure, and new driving forces": The overall electricity usage in society increased by 5.3% year-on-year, with strong growth in sectors driven by new momentum (high-tech manufacturing, internet data services, charging and battery swapping services). For the second half of the year, electricity consumption is expected to grow by 5%-6%, maintaining a generally balanced supply and demand situation. The annual addition of new power generation capacity is projected to reach 400 million kilowatts. This year marks the transition from controlling total energy consumption to controlling total carbon emissions, necessitating an increased focus on developing non-fossil energy sources in the energy and electricity sector. However, due to the intermittent nature of renewable energy (such as wind and solar), reliable alternatives have not yet been established. Therefore, the approach must shift from focusing on scale to ensuring reliability, with improvements in technology and energy storage to address supply challenges.
Economic Signals Behind Electricity Data: New Drivers of Growth
Electricity consumption serves as a barometer for the economy, and the 5.3% increase in the first half indicates a steady recovery. More importantly, there has been an optimization in the structure of electricity usage:
- The electricity consumption in high-tech and equipment manufacturing industries grew by 9.8% (6 percentage points faster than last year), with sub-sectors such as computers/communications and electrical machinery making the greatest contributions. These industries represent advanced manufacturing, and higher electricity usage indicates active production.
- New business models related to the digital economy and electric vehicles have seen explosive growth: Electricity consumption from internet data services (driven by AI applications) approached the annual total for 2024, while charging and battery swapping services experienced a 57.1% increase in June alone. These two sectors account for 15%-25% of the overall increase in electricity usage, transitioning from being marginal contributors to becoming core drivers of growth.
In short, while traditional industries may see stable electricity consumption, new sectors such as high-tech manufacturing, AI, and electric vehicles are consuming significantly more power, indicating an economy shifting towards technology-intensive and green, low-carbon development.
Stable Electricity Supply and Demand in the Second Half of the Year
The China Electricity Council predicts a 5%-6% increase in electricity consumption for the second half of the year, with a generally balanced supply and demand. The addition of 400 million kilowatts of new capacity is particularly noteworthy:
- What does 400 million kilowatts represent? It is roughly equivalent to the capacity of 40 large nuclear power plants (each with about 1 million kilowatts), and most of this new capacity will come from non-fossil sources (which currently account for 62.4% of total capacity). This means that future electricity supply will be cleaner and capable of supporting sustained economic growth.
- Power plant coal reserves have reached a historical high for the same period, indicating that traditional energy sources (such as coal-fired power) are strengthening their ability to ensure supply, alleviating concerns about power shortages during extreme weather.
The First Year of Dual Carbon Emission Controls: A Major Test for the Energy and Electricity Sector
This year, the country has shifted from controlling total energy consumption to controlling total carbon emissions, with the energy and electricity sector being at the forefront of efforts to achieve carbon peak targets. The challenges include:
- The proportion of non-fossil energy sources is still not high enough and needs to increase significantly over a decade (e.g., by expanding wind, solar, hydro, and nuclear power generation).
- It is also necessary to build large-scale clean energy bases (such as wind and solar facilities in the northwest) and distributed energy systems (such as rooftop photovoltaics).
- How can we reduce carbon emissions while increasing electricity consumption? The key is to replace fossil fuels with non-fossil sources, but the reliability of renewable energy is a major issue that needs to be addressed.
In other words, the goal has shifted from simply reducing electricity usage to using clean energy, which presents greater difficulties.
The Transition of Renewable Energy: From Focusing on Scale to Ensuring Reliability
In the past, the development of renewable energy focused on the amount of capacity installed (e.g., how many GW of solar or wind power were added). Now, the focus is on ensuring that these sources can provide reliable power when it is most needed (e.g., during peak hours in the summer). Current issues include:
- Supply-side challenges: Solar power does not generate much electricity at night, and wind power has low output during peak summer periods, leading to reliability issues.
- Storage challenges: Existing energy storage technologies (such as lithium batteries) can only store energy for about 2 hours, which is insufficient for the longer peak periods.
Solutions include:
- Building "system-friendly" renewable energy facilities with sufficient long-duration storage capacity.
- Upgrading existing power plants to incorporate energy storage systems or installing additional regulating equipment.
- Developing new long-duration energy storage technologies (e.g., using batteries that can store energy for more than 4 hours or employing other methods like pumped storage).
This transition is crucial; otherwise, even if a large amount of renewable energy capacity is installed, it will not be able to reliably replace traditional energy sources, making it difficult to achieve carbon peak targets.
Conclusion: Electricity Transformation Reflects Economic Transformation
The electricity consumption data from the first half of the year and the predictions for the second half indicate that China's economy is shifting from traditional growth models to ones driven by new, high-quality productive forces (such as high-tech manufacturing, AI, and electric vehicles). The transformation of the energy and electricity sector from fossil fuels to non-fossil sources, and from focusing on scale to ensuring reliability, is both a foundation for supporting economic transformation and a key to achieving carbon peak goals. In the coming years, we will see more clean energy facilities, long-duration energy storage projects, and smart grids, all of which will make electricity cleaner and more reliable, contributing to more sustainable economic growth.