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China coal update – very good news
(cross-commented at johnquiggin.com)
One of my New Year’s resolutions is to write as little as possible about Donald Trump. One key part of his toxic political method is to monopolize public attention. It takes a lot of effort to distinguish between empty blather and actual policy, and I have no special qualifications for cleaning out septic tanks.
The website of China’s National Statistics Bureau now provides a large number of data series in English. https://data.stats.gov.cn/english Those on energy outputs are just out for December 2024. I think they are more important than Trumpery.
Here they are verbatim for thermal generation of electricity, almost entirely from coal:
Output of Thermal Power, Current Period (100 million kwh) 5,975.0
Output of Thermal Power, Growth Rate (the same period last year) -2.6 %
Output of Thermal Power, Accumulated Growth Rate 1.5 %
Zero-carbon generation gets despatch priority on the grid, so thermal is a residual. The totals for all electricity production were:
Output of Electricity, Current Period (100 million kwh) 8,462.4
Output of Electricity, Growth Rate (the same period last year) 0.6 %
Output of Electricity, Accumulated Growth Rate 4.6 %
This CAGR growth rate translates to a mean annual increase in instantaneous demand of 72 Gw continuous equivalent.
Real GDP data are published quarterly, not monthly. The annual y-o-y growth from Q4 2023 to Q4 2024 was 4.6%, somewhat lower than the headline whole-year rate of 5%, suspiciously close to the forecast. I don’t know why Reuters report it as 5.4%. https://www.reuters.com/world/china/chinas-economic-growth-surpasses-forecasts-stimulus-push-2025-01-17/ It is reasonable to assume that electricity demand will continue to track real GDP quite closely, as it does in OECD countries, efficiency gains from heat pumps, LED lamps, smart controls etc roughly balancing new demand from electric cars, arc furnaces etc.
In a comment on 30 December (https://johnquigginblog.substack.com/p/monday-message-board-fa7/comment/83623203 ) , I puzzled over the mismatch between the Chinese electricity demand data and that on renewable installations. Plug in a corrected estimate for electricity, and the contradiction goes away. New zero-carbon generating capacity meets all the increase in demand from now on (69 Gw cont-eq in 2024) absent a black swan shock.
Since we didn’t have the December numbers then, I used a conservative estimate of Chinese solar installations for the whole year of 230 Gw nameplate. The final official total was 277 Gw (https://electrek.co/2025/01/21/china-solar-wind-2024/ ). My guesstimate for the total increase in zero-carbon capacity rises from 85 to 95 Gw cont-eq, against mean demand of 72 Gw cont-eq. The puzzle now is why it took till December for thermal generation to start falling. Expert Lauri Myllyvirta worries about growing curtailment from grid bottlenecks, but Chinese engineers are cracks at building infrastructure like HVDC lines. The coal will go first, and faster than the ever-cautious IEA projects.
You are seeing this right. On a y-o-y basis, coal generation *fell* in China in December, not spectacularly but significantly. This was not because of a sudden drop in demand for electricity, which dipped but stayed positive. The trend increase in demand was more than met by new renewables, with an assist from nuclear. Hooray, and About Bloody Time. It doesn’t look like a one-month fluke, as the y-o-y increase in thermal generation from Q4 to Q4 was an insignificant 0.05%.
Enter the usual caveats. We can’t be certain yet that coal burning in China has definitively peaked and has started its inevitable decline. The National Statistics Bureau may be cooking the books. Public holidays, mild weather, or just random noise may be responsible. Growth in coal for chemicals or steel, or more droughts cutting hydropower, can still throw the Chinawende off track. And so on. We have been burnt before and it would be prudent to wait till all the numbers are in, or at least wait another month for confirmation.
But Friar William from Ockham and the Reverend Bayes advise us to go with the evidence we have until it’s refuted by stronger evidence against, not speculations. If China has in fact passed the peak in coal, these are precisely the data we would be seeing. Pessimists don’t get to cherry-pick bad scenarios without allowing optimists our cheerful ones. For instance, the boom is electric vehicles is accelerating, in China and globally. The longstanding happy green talk in Xi’s Little Pink Book seems increasingly to reflect actual policy. Efficiency gains in solar, wind, and batteries, and economies of scale in production, show no signs of stopping. Chinese firms have got very good at installing wind and solar farms on a gigantic scale, and probably getting better at running them. So provisionally, crossing fingers, not taking it as a pretext for slacking, let’s whisper it in the Covadonga caves where scattered bands of the resistance hold on to reasoned hope: China’s coal burning has peaked.
China is the dominant GHG emitter and user of coal. A coal peak in China is probably a coal peak for the world, very possibly an emissions peak. Each step in the argument here adds uncertainty, which can only be resolved by more data. If the peak month in China was August 2024 (615 Twh of thermal generation), we won’t know for 100% certain before next summer. The Chinese coal peak is a necessary rather than a sufficient condition for the global emissions one.
All the same, the global energy transition is a done deal. Trump will no more be able to stop the massive economic and technological forces driving it than he was able to save American coal companies and miners during his first term. His second “war against the sunset glow” (fn) will be a rerun of failure on a large scale. Withdrawing from the toothless Paris Agreement will have little effect – the fangs are wielded by BYD, CATL, Longi, Goldwind and Jinko, protected by Xi Jinping, by abdication of competitors, not merit, the pre-eminent political leader in the world, like it or not. https://www.ntu.edu.tw/english/spotlight/2022/2111_20221130_1.jpg
Footnote: the quote is from Kipling, “Heriot’s Ford” – with an apposite bonus charge of sexual abuse. https://www.kiplingsociety.co.uk/poem/poems_heriot.htm
Rachel Reeves has forgotten what the classical economists all knew, what Karl Polanyi didn't forget, and what the best brains in economics have been rediscovering for the past 60 years - namely, that the economy is a subset of the biosphere.
https://www.theguardian.com/business/2025/jan/22/rachel-reeves-says-growth-matters-more-than-net-zero-heathrow-third-runway-decision