Electricity use increase shows stronger economy

China's electricity consumption, a gauge of economic activity, rose in the first two months of the year, signaling the country's economy is strengthening.

The consumption reached 789.2 billion kilowatt-hours in January and February, up 5.5 percent year-on-year, the National Energy Administration said on Thursday.

The growth in power usage was supported by the recovery of manufacturing industries with production of steel, cement, nonferrous metals and vehicles all seeing double-digit growth in the same period.

Growth in the service sector was more obvious, up 13.8 percent in the first two months, while consumption increased 4.3 percent in the agricultural industry and 4.2 percent in the industrial sector.

Electricity consumption in February dropped 12.5 percent year-on-year to 337.4 billion kWh, mainly because factories ceased or slowed operations during Lunar New Year.

Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, said the economy has shown signs of further recovery, based on the power consumption figure.

But analysts said figures for March or the first quarter will be more valuable in analyzing this year's economic situation.

China has targeted 7.5 percent economic growth this year, the same as last year. The economic growth increased by 7.8 percent in 2012.

Last year, China's electricity consumption was 4.96 trillion kWh, up 5.5 percent from 2011, according to the NEA.

The State Electricity Regulatory Commission in January predicted that electricity consumption will grow more than 9 percent in 2013, higher than last year's growth rate.

The State Council earlier this week announced that the State Electricity Regulatory Commission will no longer exist after it is folded into the National Energy Administration.

"The reorganization will help better supervise China's overall energy development, but the slash of the minister-level department, the SERC, may also indicate a strategy shift, as the SERC used to be the most active advocator for reforming China's power system," Lin said.

The restructured energy administration will mainly be responsible for the strategy, planning, policies, reform and supervision of the nation's energy development.

The country's electricity generation capacity increased by 6,480 megawatts in the first two months, with hydropower accounting for 1,560 MW and coal-fired power 3,400 MW, according to the NEA.