China's thermal power generation shifted from robust year-on-year (YoY) growth to a marked decline in November, primarily dragged down by easing electricity demand and faster expansions of hydro and nuclear sources.

Output of thermal electricity, mainly coal-fired, stood at 496.95 TWh in November, down 4.2% YoY, against a 7.3% rise a month earlier, according to data released by the National Bureau of Statistics. The output figure was down 3.3% month on month (MoM).

The decline was first driven by warmer-than-usual weather in November, which capped residential heating demand. The national average temperature last month was 4.2 degrees Celsius, which was 0.9 degree Celsius higher than the same period in previous years, according to the China Meteorological Administration. Meanwhile, the number of cold air arrivals was 1.3 times fewer than usual. The need for thermal power, often the baseline energy supplier, was suppressed.

In addition, all other major power sources saw increased output. Hydropower performed strongly due to improved water inflows and a relatively low base from the previous year. Nuclear and solar power generation experienced accelerated increases, while wind generation also turned from decline to growth.

Slowing electricity demand, combined with the displacement by clean energy sources, which are prioritized on the grid, directly contributed to thermal power's contraction.

Over January-November, China's thermal power generation amounted to 5,712.46 TWh, falling 0.7% YoY, expanding by 0.3 percentage point from the January-October period, as per NBS data.

In November, Inner Mongolia, Jiangsu, Shandong, Guangdong, and Xinjiang were the top five thermal power producers, reaching 45.27 TWh (10.2% YoY), 41.00 TWh (4.4% YoY), 38.63 TWh (-4.5% YoY), 36.32 TWh (-7.6% YoY), and 35.70 TWh (5.0% YoY), respectively.

Top provinces in cumulative electricity generation were Inner Mongolia, Jiangsu, Guangdong, Shandong, Xinjiang, and Zhejiang over January-November, with output of 537.56 TWh (-4.2% YoY), 467.96 TWh (0.5% YoY), 459.45 TWh (1.7%YoY), 445.55 TWh (-3.5% YoY), 350.13 TWh (0.7% YoY), and 330.70 TWh (7.4% YoY), respectively.

November saw 11 or 35.5% of the provinces or regions register YoY increases in thermal power generation, much lower than the month-ago 71%. Notable growth rates were observed in Xizang (43.9%), Qinghai (42.5%), Sichuan (30.3%), Gansu (16.4%), Zhejiang (8.2%), and Fujian (5.8%).

During January-November, 13 provinces or regions recorded YoY growth in thermal power generation, constituting 42% of the nation's total. Xizang (43.3%), Gansu (14.7%), Zhejiang (7.4%), Jiangxi (6.2%), Qinghai (5.0%), and Liaoning (4.6%) reported the largest growth rates.

Looking ahead, meteorological forecasts for December indicate varied regional patterns. While temperatures in northern Heilongjiang and northeastern Inner Mongolia may be 1-2 degrees Celsius lower than average, much of the rest of China is expected to be near or above normal.

Precipitation is projected to be uneven. Northern, northeastern and northwestern regions are anticipated to be wetter, while some southern and eastern areas are likely to receive less rainfall.

Entering December, although autumn rains in western China are set to end and precipitation in many parts of the country is expected to decline compared to usual levels, hydropower generation may remain strong in the short term due to abundant earlier water inflows, high storage levels in major reservoirs, and subdued national hydropower output in the year prior. This may continue to pressure thermal generation.

However, uncertainties emerge for the winter despite relatively stable thermal coal supplies. The National Energy Administration pointed out that if extreme cold or severe snow and freezing occur, certain areas in northern and eastern China may experience a tight electricity supply-demand balance during peak periods, potentially reinforcing coal-fired power's critical role as a backup source.