A Flood of Hydro Is Washing Coal From China’s Grid

Summer rains are leaving China sodden. That’s pushing coal underwater.

After several years of drought, rainfall has been lashing the country for nearly three months, flooding rivers, towns and mines. Dozens have perished in landslides, bridge collapses and inundation, and we’re still barely more than halfway through the typhoon season. 

There’s a flipside to all this devastation, though. The world’s largest system of hydroelectric power has been on standby since late 2022, when droughts caused by the La Niña climate cycle drained the reservoirs that feed it. The torrential downpours of the past few months are switching that immense machine back on.

This will have a profound effect on the dirtiest form of fuel, coal. In spite of expectations that sweltering temperatures and air conditioning would cause generation from thermal power plants to boom this summer, they’ve been going backward in what should be peak season. Electricity production has increased 4.8% from a year earlier in the three months through July, according to data issued Thursday. The amount supplied by thermal generators is down by 5.1%.

For that, you can thank China’s hydro sector, a system whose scale beggars belief. The country gets almost as much plug power from its dams as North America and South America put together. About a fifth of the world’s hydro power comes from the Yangtze and its tributaries alone.

The pulse of electricity this is producing is unlikely to switch off soon. With the recent rainfall, draining reservoirs as rapidly as possible isn’t just a requirement for the grid, but to ensure public safety. About a third of China’s hydroelectricity is generated in August, September and October to clear out backed-up floodwaters. Once those flows subside, blustery conditions typically pick up and blow strongly until April, causing a comparable increase in wind power. Thanks to a strong January and February, cumulative thermal electricity is still just about up for the year. It’s likely to slump into outright decline next month, and end the year below 2023’s total.

That might sound like victory, evidence that President Xi Jinping’s promise to peak emissions by 2030 has come years early, and a sign that consumption in the world’s biggest coal user has finally peaked. However, 2025 and the years beyond will be tougher. 

For one thing, the challenge of supplying all of China’s demand with clean power gets harder with each passing year. Usage increased by an average 245 terawatt-hours a year during the 2000s, and by 350 TWh during the 2010s. In the past five years, it’s hit 424 TWh — like adding the entire annual electricity consumption of Saudi Arabia to the grid, every 12 months.

Hydroelectricity offered a big assist for years, but the benefit is waning. The current floodwaters are a one-time recovery from drought, so won’t be repeated until the aftermath of the next dry disaster. On top of that, the orgy of dam-building that China has engaged in since the 1990s appears to be ending. More than half of the hydro installed in the first half of the year was pumped storage, a sort of giant battery that doesn’t necessarily add fresh generation to the grid.

Wind and solar are also being built at a headlong rate, but unless they accelerate still faster they’ll only cover about half of demand growth, some 200 TWh or so. Nuclear is nowhere near making up for the shortfall; at current rates of buildout, it’s only adding about 10 TWh a year.

That’s going to force a reckoning between some of Beijing’s most important targets.

China is a high-income country right now, or on the brink of being one. Xi’s emissions peak should be wholly achievable in such a place. Members of the Organization for Economic Co-operation and Development, the rich countries that make up about two-thirds of the global economy, increased their combined power consumption by just 99 TWh since 2008. That stability opened up the space for renewables to push fossil fuels out of the energy system. It was achieved even as their economies grew by about a quarter in real terms.

China’s voracious electricity demand growth is the biggest challenge to hitting that 2030 target, but it’s also a sign that the economy is failing to develop into the prosperous, ecological civilization that Xi promotes. It’s on track to consume more electricity per person this year than Germany or France. That’s a sign of a development model that’s still careening out of control. 

A world that’s hoping to grow even as it reins in carbon emissions needs to see that China can thread that tricky needle. The challenge for Beijing is now to repeat the trick year after year — all the way to zero.

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This includes both coal, gas and biomass generators, but around 95% of generation in the category is coal.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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