China's thermal power generation recorded its fourth consecutive month of growth in August, both on a monthly and yearly basis, but the pace of year-on-year (YoY) expansion slowed notably.

Output of thermal electricity, mainly coal-fired, reached 627.44 TWh in August, up 1.7% (YoY), contracting by 2.6 percentage points from July, according to data released by the National Bureau of Statistics. The output figure was also up 4.2% month on month.

This continued YoY growth in thermal power generation came despite the seasonal shift into autumn. Much of the country, particularly the southern region, remained gripped by unusually high temperatures. The national average temperature in August was 22.2 degrees Celsius, 0.9 degree Celsius above the historical norm, fueling continued demand for air conditioning.

Although thermal power output continued to rise in absolute terms, its share in the national energy mix has been shrinking. In August, thermal power accounted for 67% of total electricity generation, down slightly from 67.7% a year earlier. The squeeze comes as renewable sources, especially solar and wind, gain ground.

Clean energy generation showed a mixed performance in August. Wind power growth accelerated, while hydropower output declined more sharply. Nuclear and solar growth slowed.

The nationwide decline in hydropower, exceeding 10% YoY, was driven by uneven rainfall. While northern China experienced abnormally high precipitation due to subtropical highs and moist air currents, hydro-rich regions in the south and southwest received insufficient rain, undermining their generation capacity slightly.

Energy-intensive sectors such as cement and building materials showed signs of demand fatigue, dampening overall electricity consumption. Tighter safety and environmental inspections led to a YoY decline in raw coal output over the month, while port inventories dropped sharply. These factors likely constrained the output of thermal power producers, despite record-high grid load in several major power-consuming provinces.

Over January-August, China's thermal power generation amounted to 4,175.31 TWh, falling 0.8% YoY, contracting 0.5 pp in the January-July period, as per NBS data.

In August, Inner Mongolia, Jiangsu, Shandong, Guangdong, and Zhejiang were the top five thermal power producers, reaching 59.92 TWh (1.8% YoY), 56.64 TWh (3.2% YoY), 48.74 TWh (-5.5% YoY), 47.24 TWh (-0.5% YoY), and 39.44 TWh (8.1% YoY), respectively.

Top provinces in cumulative electricity generation were Inner Mongolia, Jiangsu, Guangdong, Shandong, Xinjiang, and Shanxi over January-August, with output of 391.12 TWh (-5.4% YoY), 335.59 TWh (-2.3% YoY), 331.93 TWh (2.2%YoY), 321.42 TWh (-5.3% YoY), 251.62 TWh (-1.5% YoY), and 236.93 TWh (-3.6% YoY), respectively.

August saw 17 or 54.8% of the provinces or regions register YoY increases in thermal power generation. Notable growth rates were observed in Qinghai (254.6%), Gansu (28.3%), Sichuan (15.9%), Shaanxi (14.3%), Ningxia (12.1%), and Jiangxi (9.1%).

During January-August, 17 provinces or regions recorded YoY growth in thermal power generation, constituting 54.8% of the nation's total. Xizang (14.7%), Gansu (11.0%), Hunan (9.9%), Jiangxi (7.0%), Hubei (6.3%), and Zhejiang (5.6%) reported the largest growth rates.

The China Meteorological Administration forecast that September temperatures in most parts of the country will be close to or above seasonal averages.

Precipitation is projected to increase in mid-to-late September, particularly in the south and parts of the northwest, which could bolster hydropower and suppress the need for additional thermal generation, compounded by the upcoming seasonal power demand lull.

In the first half of 2025, China added 212 GW of new solar power capacity, more than double the increase in 2024. While this expansion is expected to slow somewhat in the second half, total new solar capacity for the year is projected to surpass 300 GW, eclipsing last year's record of 277 GW.

In parallel, the State Grid Energy Research Institute anticipated new wind power installations to reach approximately 140 GW in 2025, marking a 77% YoY surge. As renewable generation ramps up and the summer peak recedes, thermal power generation is expected to retreat in the short term.