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China Boosts Coal & Gas Consumption as Power Demand Nears Record High

China is ramping up coal and natural gas production, imports, and consumption as its electricity demand jumped in the year’s second half and looks to hit a record-high winter peak demand.

Chinese authorities have been keen to avoid a repeat of last year’s shortages and spiking prices and have instructed utilities and producers to maximize imports and output before the winter.

Ahead of the 2023/2024 heating season, China looks better prepared to meet peak power demand than in the previous winter.

China sees its peak power demand potentially rising by 12.1%, or by 140 gigawatts (GW), this winter, a spokesperson for the National Energy Administration (NEA) said at the end of October.

Generally, China is certain that its winter power supply is guaranteed, but shortages could occur in the Yunnan province and Inner Mongolia, according to NEA spokesperson Zhang Xing, quoted by Reuters.

Previously, figures by the NEA have shown that the peak power demand in China was at 1,159 GW last winter.

This winter, peak demand is expected to be higher due to increased consumption in the second half of the year, including a hotter-than-normal summer.

Related: China Issues Additional Fuel Import Quotas

China will continue to provide high levels of coal volumes to ensure stability in power supply this winter, according to the official.

Energy major CNOOC said in September that China’s natural gas demand is set for an 8% increase this year compared to 2022, with imports of both LNG and pipeline gas expected to rise by around 11%.

Much lower LNG prices this year than last have helped drive Chinese LNG imports higher, potentially sapping the global market at the expense of Europe, which relies on LNG to offset the loss of Russian pipeline gas supply.

Demand in Europe and Asia is rising in November compared to the warmer October, but LNG spot prices in Asia have either dropped or remained steady in the past few weeks amid high inventories in both Asia and Europe and weak demand.