China to consume more power in 2013

Government expects power use to increase by 9% despite high coal prices.

The State Electricity Regulatory Commission (SERC), China's electricity regulator, said power consumption nationwide is expected to increase by over 9% in 2013 from 2012, up from the 5.5% year-on-year growth recorded in 2012.

SERC said electricity consumption began to pick up month-on-month in October 2012, and saw 7.45% year-on-year growth in the fourth quarter of last year.

It said the faster growth rate for 2013 will be driven mainly by increasing industrial power consumption. Despite the growing demand for electricity, however, large-scale power shortages are not likely in 2013.

This is because thermal power plants have enough facilities to satisfy rising demand, so there might only be power shortages in certain areas in the peak season for power consumption.

Analysts expect thermal coal prices to rise moderately in 2013 since the National Development and Reform Commission’s decision not to intervene in setting thermal coal prices.

Starting this January 1, NDRC no longer requires coal suppliers to sell a certain quantity of coal to power companies at preferential prices that are usually far below market prices.