Thread by @laurimyllyvirta

China's power generation from coal and gas increased 3% on year in March, the 4th month of increase in a row, due to underperformance of wind, solar & nuclear. Wind conditions in March-April have been extraordinarily bad, solar bad too; nuclear has seen long refueling outages.

Unfavorable weather doesn't account for all of the weakness in clean power generation this year - grid congestion due to inflexible operation of coal plants and transmission lines plays a role too, especially in Jan-Feb when weather conditions were actually better than last year.

Grid congestion doesn't affect just wind&solar - nuclear gets curtailed too! China's largest nuclear operator CGN reported one of its plants getting curtailed in Q1, and in China it's usually a safe bet that more curtailment happens than gets reported.
www1.hkexnews.hk/listedco/listc…

We've warned since the resumption of coal power construction in 2020 that there isn't space for both clean energy and coal to grow. This warning is being realized at the worst time - during a fossil fuel crunch.

The government is working to resolve the issue of clean energy curtailment and the weak clean energy growth this year hopefully injects some urgency. There is the encouraging precedent of rampant curtailment in early to mid 2010s brought down sharply by 2020.

Good news is that the fossil power rebound seems to have ended in May, with a -8% drop in coal power generation in the first week of the month according to China Electricity Council.

The fossil fuel crunch affected China's refining and chemical industry, with refinery throughput down 6%, ethylene and chemical fibers down 4%.

Together with a small 1% increase in domestic oil production, the drop in oil refining and chemicals production goes some way towards explaining the sharp reduction in China's oil imports.

Solar cell output fell 25% due to weaker installations in China and a drop in exports after the March surge. Domestic solar deployment has slowed down after last year's frenzy.

EV production inched up even as overall vehicle production fell, with the share of EVs rising to 51% of all vehicles produced, up from 47% in April last year.

Steel and cement output continued to fall, by 3% and 11%, showing how falling construction volumes are continuing to result in emission reductions.

The growth in overall value of industrial production slowed down to 4% in April, from 6% in Q1, with the high oil prices and weakness in clean energy manufacturing both exerting a toll.