China’s power capacity soars

China’s soaring economic growth has been headlined in recent years by a single, attention-grabbing statistic: China each year adds new power generating capacity equal to the UK’s entire electricity grid.

But China surpassed this benchmark last year, according to new figures released quietly at the end of January by the China Electric Power News, the mouthpiece of the state industry.

The paper reported that new power capacity in 2006 had expanded by 102 gigawatts, or roughly equal to the entire capacity of the UK and Thailand combined, or about twice the generating assets of California, the state with the biggest economy in the US.

The figures have received little coverage in part because many local and foreign industry experts were so surprised at the figures for new capacity that they questioned their accuracy.

“It was a shock even for us who track the numbers,” said Jiang Lin of the China Energy Group at the University of California, Berkeley.

The State Grid Corp, which controls 80 per cent of China’s power transmission, and which is generally the authority on such issues, also appeared to have been caught by surprise by the surge.

The State Grid itself estimated just months ago that new capacity would be about 75-80GW, a shortfall of about 20 to 25 per cent on the latest number.

Li Xiaolin, of the Songlin Group, a power consultancy in Beijing, said she had been inundated with calls from clients expressing disbelief at the number and asking her if it was correct.

Ms Li said her consultancy’s initial assessment had now come up with a similar figure, of about 101GW.

“As for why the figure suddenly increased from 75GW to 101GW, there are two answers,” she said. Power stations under construction had been commissioned much faster than expected, Ms Li said, and many built without central government approval had now been licensed.

An official for the State Grid defended its estimate, saying it had knowingly put out the lower figure because of the delays in the approval process overseen by another ministry.

“We expected the total capacity to reach 102GW last year, but we had to take account of the possible delays due to a slow approval procedure by the National Development and Reform Commission [the planning ministry],” the official said.

Just less than 90 per cent of the new plants are powered by coal, an inevitable result of a rapid build-up in capacity. Hydro power accounted for 10 per cent and new nuclear plants about 1 per cent.

“Hydro and nuclear plants can take years longer to commission than coal plants of similar size,” said Jonathan Sinton, the China Programme Manager at the International Energy Agency in Paris.

The confusion over the numbers, and the explosion in capacity, is the result of the often competing and conflicting priorities of the central government and localities.

While Beijing still insists on approving every new power plant over a certain size, but many localities build them anyway in the expectation they will eventually get approval. Driving them is the fear that any delay would stunt the pace of regional development relative to other parts of the country.

There is no slowdown in sight. New capacity expected to come on line this year of about 90GW.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.