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Thursday, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
 Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop of 6.5% in 1Q20 when market demand was dampened by the Covid-19 outbreak. Demand from the industrial sector, the main driver of power consumption growth, surged by 23.9% yoy in 1Q21.Consumption from the tertiary sector and agricultural users also jumped by 28.2% and 26.4%, respectively, during the quarter, Fitch Ratings says in its latest report.
Demand Exceeds Pre-Covid-19Levels
Power demand gained 14.4% in 1Q21 from 1Q19, driven by the industrial sector’s 15.3% increase and the tertiary sector’s 16.5% gain. Demand from agricultural users, which accounted for only 1.1% of total demand, surged by 31.3%in 1Q21 from 1Q19, led by the upgrade of power grids in rural areas.
Higher Contribution from Tertiary Sector
The contribution of the tertiary sector to consumption rose to 17.3% in 1Q21, from 16.7% in 1Q20. Tertiary demand was marked by the rapid consumption growth of information and technology services, which jumped by 26.5% on average in the past two years due to the fast development of big data, cloud computing and internet of things sector. Demand from the charging and battery swapping industry shot up by 92.2% on average in 2019 and 2020, the result of faster growth in the new-energy vehicle sector.
Thermal Power Underpins Generation Growth
Power generation rose by 19% yoy in 1Q21, primarily driven by thermal power’s output increase of21.1%, accounting for 73% of total power supply, which was 7pp higher than 2020. This was because of the higher output from heating power co-generation thermal units, and lower wind and solar contribution in winter.
Fuel Mix Continues to Improve
The proportion of coal-fired power capacity in China’s fuel mix decreased to 48.8% in 1Q21, after dropping to below 50% for the first time byend-2020. Fitch Ratings expects the share to drop in 2021, as China is promoting renewable energy to achieve net zero emissions by 2060. China added 23.5GW in power capacity in 1Q21, 55% of which were non-fossil fuels, including 5.33GWin solar power capacity, a 56% yoy gain, and 5.26GW in wind power capacity, a 123% jump. China also added 1.15GW in nuclear power capacity and 1.09GW in hydropower capacity in 1Q21.
Improving Coal-Fired Power Plants’ Flexibility
The report further noted that, some provinces, such as Shandong, have extended the service life of some large and efficient coal-fired power units, which also supply heat and have met environmental protection requirements This will ensure a stable power supply as renew able energy is usually affected by the intermittent nature of its source.
Utilisation Hours Improved in1Q21
Utilisation hours (UH) rose by 97 to 915 in 1Q21 from 1Q19 as power demand recovered further. Wind power UH improved by 69 hours to 619 hours, while solar power UH increased to 300 hours, up by 10 hours from1Q19. Yunnan, Sichuan and Jiangsu were the top-three provinces with the highest wind UH, while north-east and north-west China had the highest solar UH.
Thermal and nuclear power UH surged by 165 and 218, respectively, from 1Q20 due to strong consumption growth, higher connection priority for heat-power co-generation in the heating season, and lower output of hydropower, whose UH fell by 21 as a result of lower water flow.
Thermal power capacity installation rose by 10.6GW in 1Q21, including 4.77GW coal-fired power and 2.95GW gas-fired power, some of which were used for peak shaving. We expect renewable energy to continue to drive China’s power capacity installation in the rest of 2021 as the state is pushing for renewable energy to achieve carbon neutrality by 2060.Generation capex in 1Q21amounted to CNY79.5 billion, including 49.4% in wind, solar and biomass, 30.8% in hydro and 9.7% in nuclear. Capex contribution from thermal power fell to 10.1% in 1Q21, from 10.5% in 2020, under the government’s restrictions on thermal power installations given the environmental ramifications.
High Coal Prices to Squeeze Power Generating Companies’ Profit
Coal production rose 16% yoy to 970 million tonnes in 1Q21, slower than the 22% growth of coal-fired power output, resulting in higher coal prices. The Qinhuangdao 5,500 kcal/kg coal price rose 72.6% yoy to CNY 801/tonne by end April-2021. High coal prices will squeeze power generating companies’ profit and operating cash flow, which will be worsened by a lower coal-fired power tariff due to higher market trading volume.
By: Ms.Zhihua Zhang | Ms. Diana Xia
Fitch Ratings, China
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Wednesday, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
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- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
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- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
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- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
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- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
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- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
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- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
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- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
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- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
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- Interocean Group of Companies - India
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- Lanco Infratech Ltd - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
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- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
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- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
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- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
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- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
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- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
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- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
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- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
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- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
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