Heavy rainfall cut China's coal demand significantly

Heavy rainfall has hurt China recently. Huge precipitation on the other hand boosts hydroelectricity output over the country. The higher hydroelectricity supply seems to be reducing thermal power generation amid sluggish growth of electricity demand.

Chinese total electricity supply in June was 393 billion kilowatts hour, flat from a year ago, according to the National Bureau of Statistics. Hydroelectricity rose 19.4% from a year earlier to 75 billion kWh in the month, while thermal power decreased by 4.2% on year to 295 billion kWh.

China's total electricity supply in the first half of this year rose 3.7% from a year ago to 2.3 trillion kWh, thermal power increased only 2.9% on year to 1.9 trillion kWh and Hydroelectricity surged 9.9% on year to 291 billion kWh.

Recent slump in thermal power is apparently affecting on coal prices.
Chinese thermal power plants mainly use coal as their fuel. Domestic prices of coal for thermal power generation was RMB 808 per tonne at the end of 2011. The price had fallen by 13% to RMB 702 per tonne through the first half of this year, then slipped by further 10% to RMB 631 per tonne in July.

China added 4.2 million kilowatts of new hydro electric generation facilities at its Three Gorges Dam in early July. The world largest hydroelectric plant is now operated at 22.5 million kw of designed full capacity.

China's hydroelectricity output seems to increase further in July, due to the added capacity and ample water supply. It is likely to reduce thermal power outputs further.

Electricity supply shortage caused turmoil frequently over the past few years in China since supply capacity had failed to catch up with faster growth of demand. Surges of diesel oil demand for on-site power generation were triggered by the power supply disruptions, but situations in the nation seem to have been changed at all.

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