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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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Tuesday, 08 March 22
RUSSIA-UKRAINE CONFLICT ADDS IMPETUS TO ASIA'S ENERGY TRANSITION - IEEFA
Clean energy alternatives are a crucial hedge against future disruptions in global commodity markets
Russia’s invasion of Ukra ...
Tuesday, 08 March 22
THE HIGH COST OF INDONESIA’S DOWNSTREAM COAL PROJECTS IS UNDERESTIMATED - IEEFA
Three Indonesian ministries have come up with a DME purchase price of US$378/tonne fixed for 20 years compared to IEEFA’s US$601/tonne estima ...
Wednesday, 02 March 22
SHIPPING MARKET INSIGHT - INTERMODAL
The escalating confrontation between Russia and Ukraine has the potential to disrupt global order and set the world back a few decades. While count ...
Tuesday, 22 February 22
THE DRY BULK MARKET HAS MOVED ON A POSITIVE TRACK - ALLIED
The dry bulk market has moved on a positive track as of the past couple of weeks or so. Following the typical softening in freight conditions durin ...
Tuesday, 22 February 22
CHINA'S DAILY OUTPUT OF COAL REBOUNDS TO OVER 12 MLN TONNES - REUTERS
China’s coal output returned to more than 12 million tonnes per day as of Feb. 20, the country’s state planner said on Monday, a level ...
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- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Economic Council, Georgia
- VISA Power Limited - India
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Videocon Industries ltd - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
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