CHINA'S power generation capacity surged 14.36 percent to 713,290 megawatts by the end of last year, generally in line with the pace of demand growth, according to the China Electricity Council.
But the national power plant usage rate continues to fall, eroding profit margins of power producers, as a large number of new capacity comes onstream in an industry which has already seen excess generating capacity.
The capacity in coal-fired plants increased 14.6 percent to 554,420MW. The capacity in wind farms jumped 94.4 percent to 4,030MW as the nation develops renewable energy rapidly.
The national consumption jumped 14.42 percent to 3.25 trillion kilowatt-hours in 2007, the industry council said.
Capacity rose lower than an earlier projection of 15.3 percent by the State Grid Corp of China. But the consumption growth was larger than what State Grid had forecast a year ago as 11 percent to 12.5 percent.
The figures eased concern that the oversupply condition would deteriorate. China has a surplus in power generating capacity due to poor grid connection in some remote regions and after its investment in the power generating sector surged 57.7 percent in 2005.
The government has been trying to improve the imbalance by accelerating spending in grids while curbing investment in plants and closing inefficient units.
The council said China spent 304.15 billion yuan (US$41.8 billion) last year in power generation projects and 245.14 billion yuan in power grids. This represented a decline of 2.6 percent and a rise of 16.4 percent respectively from a year earlier.
China shut down 14,380MW of small and inefficient coal-fired capacity in 2007, the Beijing-based council said.
"With a large number of new generation capacity coming onstream, there is an improvement in the nationwide supply," the council said in a statement. "But the power plant usage rate continued to decline significantly."
The usage rates in Chinese power plants with a capacity of 6MW or above averaged 5,011 hours last year, down 3.6 percent from 2006, the council said.