Thermal Power's Declining Share in China’s Energy Mix as Hydro and Renewables Surge

Despite facing economic challenges, China's power consumption is experiencing rapid growth, increasing by over 4% annually. This surge adds approximately 350 TWh to the grid each year—equivalent to the entire annual consumption of Germany. Key drivers behind this growth include the expansion of electric vehicles, the proliferation of data centers, and the rising demand for climate-related heating and cooling solutions.

In July, Chinese power production reached a record-breaking 883 TWh, reflecting a month-over-month increase of 115 TWh and a year-over-year rise of 37 TWh. Hydropower also approached an all-time high, generating 166 TWh. In contrast, wind and solar power production remained relatively stable compared to June.

Despite the significant uptick in hydropower, thermal power generation also rose to 575 TWh, marking an 88 TWh increase month-over-month, although it was down 25 TWh compared to the previous year. This increase was necessary to meet the overall rise in power demand. Notably, the share of thermal power in the energy mix dropped to 65% in August, an all-time low for the month, as hydropower and renewable energy sources continue to expand at a faster pace than thermal power.

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