BMI View: This quarter our forecasts remain virtually unchanged. China's power continue s to be affected negatively by t he ongoing economic slowdown in the country and the government's continued efforts to tackle coal consumption. T he government's centralised coal reduction efforts, coupled with the increased adoption of renewable energy - and also 'cleaner' fuels such as nuclear power - will lessen coal's dominance of the power mix over the coming decade. We expect coal-fired power generation to contract over 2016 and 2017, with coal contributing around 55% to the total electricity mix by 2025 - from a contribution level of about 70% in 2015. The outlook for power consumption is similarly muted, with annual average growth rates of 3% between 2016 and 2025, as China's economy shifts away from power-intensive manufacturing.
|e/f = BMI estimate/forecast. Source: GWEC, BMI|
|Generation, Total, TWh||5,278.620||5,293.580||5,315.610||5,513.370||5,724.460||5,929.100||6,132.830|
|Consumption, Net Consumption, TWh||5,010.5||5,033.0||5,050.6||5,252.7||5,462.8||5,664.9||5,866.0|
|Capacity, Net, MW||1,519,789.0||1,611,845.0||1,723,681.0||1,813,008.4||1,903,302.8||1,999,812.6||2,093,578.2|
Latest Updates And Structural Trends
China's role in regional power markets across the world will continue to expand throughout 2016, with both developed and developing markets targeted for investment. Chinese companies will be most active in the coal, hydropower, nuclear and renewables equipment industries, gaining market share in these sectors.
The Chinese government will push-on with its coal reduction policies, despite ongoing provincial-level resistance, in a bid to reduce overcapacity in the power sector and curb pollution. We expect coal-fired power generation to contract over 2016 and 2017, with coal accounting for around 55% of the total electricity generation mix by 2025.
China's thermal coal imports will register strong growth over the coming months before subsiding gradually in the coming years. The recent pickup in demand due to government stimulus measures will fade out by 2017, while production declines will become less severe over the years to 2020 after suffering most pronounced cuts in 2016.
By the end of our forecast period in 2025, we expect nuclear capacity in China to surge from an estimated 26.7 gigawatts (GW) in 2015 to over 100GW in 2025 as the mammoth pipeline of reactors that are planned, proposed or under construction gradually comes online ( see 'Nuclear Technology Footprint To Expand', April 15). This will make China one of the largest nuclear markets globally in terms of total installed capacity.
China's newly adopted 13th Five-Year Plan for the years 2016-2020 reaffirms our long-held view that cleaner energy sources, notably natural gas, will claim a greater share of the country's total energy mix over the coming years. The plan's emphasis on greater private participation and privatisation reiterates the government's commitment to reforming its oil and gas sector at a time when spare capacity is putting a lot of pressure on the operations of its heavy industry SOEs.
The China Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The China Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for China to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks China's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in China.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).