- Electricity consumption increases by 3.4% y-o-y in Jan-May’25
- Coal plants supported through fixed capacity payment scheme
Mysteel Global: China’s electricity consumption is expected to grow 5-6% y-o-y in 2025, factoring in the country’s forecast economic growth and the acceleration in the national power market reforms, the China Electricity Council (CEC) said in its latest annual report on 10 July.
The projection, outlined in the China Power Industry Annual Development Report 2025, reflects the council’s cautious optimism about near-term economic prospects, underpinned by targeted macro policies and gradual industrial transformation.
“Power supply and demand nationwide are expected to keep generally balanced in 2025,” the report stated. “Localised shortages may occur during summer peak demand periods, but (these) can be mitigated through inter-provincial electricity transfers and increased external procurement.”
During this year’s January-May period, China’s electricity consumption reached 3.97 trillion kilowatt-hours (kWh), marking a 3.4% increase y-o-y. Monthly growth rates have held above 4% since March, signalling the resilience and vitality of China’s economy despite external headwinds.
China’s unified national power market is on track for substantial progress this year, with regulators reaffirming their commitment to complete foundational frameworks by year-end.
During January-May, market-based electricity transactions totalled 2.45 trillion kWh, rising by 5.7% y-o-y and accounting for 61.8% of total consumption. Full-year volumes are expected to exceed 6 trillion kWh, further increasing the role of market-based price signals.
Provincial spot markets have accelerated, cross-regional trading has broken new ground, and institutional frameworks are advancing, said Han Fang, deputy director of CEC’s Planning Department.
The report also highlighted the coal power capacity pricing scheme, which has played a significant role in alleviating the financial pressure faced by coal-based generators since it was launched last year, encouraging them to maintain stable operations in the face of fiercer competition from renewables.
In this scheme, grid operators provide fixed payments to coal-fired power plants based on their available generation capacity, rather than just their actual electricity output. As such, operators of coal-fired power plants can maintain stable revenues without worrying about low output when renewables are in full swing, Mysteel Global learnt.
Preliminary data show RMB 95 billion was paid in capacity fees last year, with an average fixed cost recovery of RMB 92/kW-year, according to the report.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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