China's electricity output in July grew at a faster pace than June, when growth stalled, as rising hydroelectric power output offset weaker thermal power output.
July power output was also supported by stronger residential demand, which offset weaker industrial demand for electricity. China's manufacturing activity remained weak in July, while gross domestic product grew just 7.6% in the second quarter from a year earlier, the slowest rate since the first quarter of 2009.
Chinese power plants produced 453.69 billion kilowatt-hours of electricity in July, the State Electricity Regulatory Commission said on its website, without comparing it with year-earlier levels.
However, according to government data, China produced 425.2 billion kWh of electricity in July 2011, which translates into growth of about 6.7% on year, Dow Jones Newswires' calculations show.
China's power output, an important economic indicator, was unchanged in June from a year earlier at 393.4 billion kWh, the National Bureau of Statistics said, amid weak domestic economic and industrial output growth.
Sufficient hydropower output from central China offset weaker thermal power output in July, the SERC said, adding that power plants are shutting in areas heavily dependent on coal-fired power generation because of weaker demand.
"Since the beginning of summer, thermal power output has dropped and recorded negative year-on-year growth for three consecutive months," said Liu Dongna, a coal analyst with Shandong-based energy consultancy Chem99, adding that the data that will be released next week may confirm that July's thermal output also declined.
China's thermal power output in April, May and June was 304.9 billion kWh, 301.4 billion kWh and 295.3 billion kWh, respectively, declining by 0.4%, 1.5% and 4.2% compared with their corresponding months in 2011.
A breakdown of China's electricity production, which will include thermal power output, will be released next week.
"The squeeze on thermal power output is mainly underpinned by weak industrial demand from coal-reliant sectors such as cement mixing, fertilizer production and especially steel production," Ms. Liu said.
July's power output has been underpinned by residential demand, which is increasing this summer and is supplementing industrial demand, she said.
The eastern provinces of Guangdong, Jiangsu, Shandong and Zhejiang were the top power-consuming regions in the country in July, according to the SERC.
"The fact that it is these economically developed regions, instead of traditionally industrial-intensive regions...reveals that residential power consumption rose sharply during the summer, " she said.