Electricity consumption growth rebounded significantly in the first two months of this year, with high-tech industries leading the recovery

Why does AI and artificial intelligence computing power construction drive electricity consumption to soar?

【Global Network Finance Comprehensive Report】According to the latest data released by the National Energy Administration on March 17, electricity consumption in China showed a strong recovery in the first two months of this year. The total electricity consumption across society reached 1.65 trillion kWh, an increase of 6.1% year-on-year, significantly up by 4.7 percentage points compared to the same period last year. This data indicates a steady start to the national economy this year and reveals new momentum for economic transformation and upgrading.

Image source: Screenshot of National Energy Administration announcement

Regarding the significant rebound in electricity growth, Jiang Debin, Deputy Director of the Statistics and Digital Intelligence Department of the China Electricity Council, analyzed that this is mainly influenced by two factors: first, the cold wave in January this year increased heating loads; second, the base from the same period last year was relatively low. Looking at the structure from the total volume, the highlights of economic operation are more evident. The electricity consumption of high-tech and equipment manufacturing industries, as well as high-tech and new business-related service industries, is particularly prominent, becoming the core engine driving overall social electricity growth.

By industry, electricity use in the first two months showed a coordinated rebound. The primary industry’s electricity consumption increased by 7.4% year-on-year; the secondary industry’s increased by 6.3%, with a growth rate 5.4 percentage points higher than the same period last year, indicating a strong industrial recovery; the tertiary industry’s electricity consumption rose by 8.3%, with a noticeable acceleration; urban and rural residents’ electricity use also increased by 2.7% year-on-year.

Within the secondary industry, structural optimization features are very prominent. The electricity consumption of high-tech and equipment manufacturing industries grew strongly, with a year-on-year increase of 10.6% in the first two months, 4.9 percentage points higher than December last year, with all sub-sectors achieving growth. Specifically, driven by accelerated AI computing power construction and deepening energy transformation, electrical machinery and equipment manufacturing saw a 15.1% surge; computer, communication, and other electronic device manufacturing increased by 12.3%; general and specialized equipment manufacturing also exceeded 10% growth. This indicates that manufacturing is accelerating towards high-end and intelligent development.

The booming digital economy is directly reflected in the data. In the first two months, electricity consumption in information transmission, software, and information technology services increased by 18.6% year-on-year. Among them, internet data services soared by 46.2%, and charging and swapping services grew by 55.1%. Data from Southern Power Grid also confirms this trend: driven by explosive growth in the AI industry, the data center in Guian New Area, Guizhou, saw a 51.6% year-on-year increase in electricity use in the first two months.

The surge in electricity demand has also driven the acceleration of power infrastructure construction. To ensure electricity supply for high-energy-consuming new infrastructure like data centers, the Guizhou 500kV Machang transmission and transformation project, with a total investment of over 500 million yuan by Southern Power Grid, is in the sprint stage and is expected to be completed by the end of March, adding 2 million kW of power supply capacity. In the first two months, Southern Power Grid and State Grid completed fixed asset investments of 25.08 billion yuan and 75.7 billion yuan respectively, with year-on-year growth rates of 95.3% and 80.6%. Grid investment not only provides a solid support for energy security but also becomes an important driver of economic growth.

Additionally, traditional industries and consumer goods manufacturing also show signs of warmth. The electricity consumption of the four major high-energy-consuming industries increased by 3.9% year-on-year, with the building materials industry achieving positive growth for the first time since March last year. Consumer goods manufacturing increased by 8.0%, with all 12 sub-sectors showing positive growth, including furniture, paper, textiles, and apparel, indicating a steady recovery of domestic demand.

Industry analysts point out that electricity consumption, as a “barometer” and “weathervane” of economic operation, shows that the data rebound in the first two months is not only in quantity but also in quality. The rapid lead of high-tech manufacturing and digital economy service industries in electricity growth indicates that, under the continued release of macro policies, new productive forces are accelerating to form and grow, increasingly supporting economic growth. The doubling of grid investment reflects the rapid response of energy infrastructure to new industry demands and demonstrates the effective implementation of counter-cyclical policies. With ongoing efforts to stabilize growth and the arrival of peak consumption seasons, it is expected that total social electricity consumption will continue to grow steadily and relatively quickly. (Wen Xin)