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From this month’s issue:
The magnitude of China’s slowdown has become rather pronounced, and is best observed in the progress of its electricity generation. For much of the last decade, China’s annual growth in electricity generation ran in the double digits—sometimes as high as 12% per annum. For the period 2004-2014, however, that average growth rate has now fallen to 9.44%, as slower years following 2010 have pulled the average downward. TerraJoule.us has been able to source China’s data through October of 2014, and annualizing those figures indicates that China’s power generation growth has fallen to just 4.2% in 2014, compared to the prior year. There are a couple of ways to think about this trend. First, the more general weakness in global demand is reflected in China’s weaker manufacturing sector. Second, this is precisely the slow growth that makes it possible for renewables to gain market share, as coal lags. And finally, the world economy simply awaits China’s next advance in energy consumption. While many think this is a secular slowdown, the example of the US after its heavy industrial phase is instructive. The US consumer economy actually drove energy demand for many decades, after 1960, which saw demand nearly double over the following 40 years. There remains significant upside risk, therefore, in China’s energy demand over the next next several decades. | see: China Electricity Generation in TWh 2004-2014.