China’s slowdown dampens electricity demand

Power consumption remains flat in China, another symptom of the country’s deceleration.

China's electricity consumption growth rate in April rose 3.7% year-on-year, the slowest in 16 months. In April 2010 and April 2011, however, power consumption rose by double digits.

Power consumption this April was 390 billion kilowatt hours, 26 billion kWh less compared to March, said the National Energy Administration.

Lin Boqiang, director of the China Center for Energy Economic Research at Xiamen University, said the reduced power use in April, a month that usually sees increased consumption, shows that China's economy is slowing down.

Based on China's first-quarter economic indicators, many analysts said the economy has yet to bottom out. This could happen in the second quarter, however.

In April, power consumption by secondary industries was 291 billion kWh, up 1.6% on the previous year. From January to April, electricity consumption by tertiary industries and for residential use rose in double-digits.

Electricity consumption for industrial use, especially by light industry, shows the manufacturing sector is facing difficulties.

The China Electricity Council forecasts slower growth in power consumption in the third quarter year-on-year. It estimates total power consumption in the first half of at between 2.41 trillion kWh to 2.45 trillion kWh, with a year-on-year growth rate of 8%.

Electricity use for 2012 is placed between 5 trillion kWh to 5.19 trillion kWh, up 9.5% year-on-year.

CEC believes China will experience power shortages of around 30 million kWh this summer, the peak period for power consumption.