Concerns about power shortages could force China to rely more on coal to keep grids stable amid the growing demand for electricity, including from the rising electric vehicles (EV) fleet, analysts at ANZ Group say.
The rise in EV sales in the world's largest EV market, China, is set to increase pressure on the grids, which have struggled recently amid low hydropower output and rising power demand from industry and households.
In these circumstances, the "only real option in the short term" for China to boost its electricity grid stability is to increase coal-fired power production, ANZ Group analysts Daniel Hynes and Soni Kumari said in a report on Thursday, as carried by Bloomberg.
"Power shortages are likely to reemerge as the acceleration in the energy transition continues to put pressure on electricity networks," the analysts added.
As China's electricity demand is set to increase, some areas of the country could face renewed power shortages at peak demand times this summer, Chinese officials said last week.
The maximum power load could hit 1,360 gigawatts (GW) in the summer, which could lead to shortages in some regions, Liang Changxin, a spokesman for the National Energy Administration (NEA), said at a news conference today, as carried by Bloomberg.
The expected maximum power load would be higher than the 1,290 GW seen last year. In 2022, a heatwave depleted hydropower reservoirs, and power cuts were enacted in some parts of southwestern China. Back then, the outages led to factory shutdowns and declines in manufacturing production in August, which further weighed on the weak economic growth in China last year.
Throughout August last year, China had to extend orders for industries to shut down production as heatwaves and extreme drought in its southwestern regions boosted electricity demand while reducing hydropower production in the largest hydropower-generating province.
By Michael Kern for Oilprice.com
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