By Paul Homewood
It has been reported that global coal power generation has fallen this year, and in particular that it has flatlined in China and India. This is being taken as an indication that it has peaked and will soon start dropping rapidly.
It was alluded to by AEP again this week, in another of his delusional articles about new coal plants being built in China:
Yet there is a big twist to this Chinese saga that may ultimately turn the picture on its head. Utilisation rates of China’s coal plants have collapsed to a record low of 48.6pc. The new plants are a commercial absurdity.
“China is going to waste a lot of money on stranded assets. Demand for electricity generated from thermal coal is already beginning to fall,” says Kingsmill Bond from Carbon Tracker.
Behind this is a wave of disruption from super-cheap solar and wind power hitting the grid. A recent paper by three Chinese economists in Nature Energy concluded that solar has trumped coal power in all 344 cities and in every sub-climate of the country. “We reveal that all of these cities can achieve—without subsidies—solar PV electricity prices lower than grid-supplied prices,” they said.
But what is actually happening?
We know of course that coal power is in decline in Europe and the US, but in Asia things are not so simple.
China
https://chinaenergyportal.org/en/2019-q3-electricity-and-energy-statistics/
The Q3 YTD’s show that thermal generation (essentially all coal) has only risen by 0.5%, underwhelming to say the least.
At the same time a year ago, it had increased by 6.9%, totally dwarfing the rise in renewables:
https://chinaenergyportal.org/en/2018-q3-electricity-and-energy-statistics/
But a closer look reveals:
- The increase in total generation this year is running at less than half that of last year. This reflects the drastic slowdown in China’s economy, which Bloomberg report on here.
- If total demand had risen at last year’s rate, thermal generation would have risen by 211 TWh, virtually as much as last year. Output from nuclear, hydro and renewables is of course already being maximised.
- Renewable generation has also slowed markedly, rising by 36 TWh against 64 TWh last year. This makes a nonsense of AEP’s claim that it is the abundance of cheap solar power which has disrupted coal power.
- Hydro has also added much more than last year, although capacity has barely increased this year. This indicates more rainfall. Either way, it is unlikely that hydro power will rise again next year, and indeed could drop.
- Nuclear power has also gone up by 21% this year reflecting new capacity coming on stream, which has increased capacity from 39 to 48 GW in the last 12 months.
In short, there is nothing here to suggest that coal power in China has peaked. If the economy continues to slow, the growth in coal power will no doubt remain sluggish, but it is also likely that new investment in wind and solar will also be drastically curtailed.
India
http://www.cea.nic.in/monthlyarchive.html
As for India, thermal generation has dropped by 2% in the seven months since April, compared to the same period last year. This is primarily because of an increase in hydro and nuclear power.
Hydro capacity has not increased this year, suggesting that rainfall has been greater this year. We know, of course, that this has been the case in the summer monsoon.
If hydro power had not increased this year, thermal generation would have been about the same as in 2018.
Nuclear capacity is also unchanged, but utilisation has increased from 74% to 97% this year, presumably indicating operational problems a year ago.
The table does not include renewables, as the data is always a month behind. However up to September, they had only increased by 4 TWh, or just a half a percent of total generation.
This equates to a growth in renewable energy of only 6% this year, which represents an astonishing slow down. In each of the last three years, growth has been above 20%.
But the most significant factor has been the drastic slow down in total power demand, which has increased by just 1.6% so far this year.
In comparison, it rose by 6% last year, and by 36% over the last five years.
This reflects the sudden and major contraction in Indian economic growth this year. CNN reported yesterday that growth has slumped to 4.5% in the latest quarter, down from annual growth of 9% in recent years.
Notably the manufacturing sector shrank 1% last quarter, compared to 6.9% growth during the same period a year ago.
Both China and India assumed continuing strong economic growth, when planning the expansion of their power sectors. If growth remains subdued, it is inevitable that there will be surplus generating capacity, and that coal power will rise much more slowly, if at all.
No doubt we will hear many claims that this means coal power has peaked, but nothing could be further from the truth.
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November 30, 2019 at 06:43AM
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