Does China have a huge electricity advantage over the United States?

China uses most of its electricity for industry, while the US consumes it in households and commercial services.

A few days ago, Elon Musk posted the following:

The chart is one that I know all too well: it comes from Our World in Data (based on data from Ember).

It’s not the first time I’ve seen people share a version of this chart, arguing that China’s huge growth in electricity generation means it should (or will) dominate global industrial output.

The replies are always the same: China has a much larger population, and when we adjust for that, the US generates far more. That’s certainly true. Here is the same comparison in per capita terms. China has overtaken the European Union in the last few years, but the US is still far ahead.

What’s also important here is the difference in the trend: electricity use in the US and EU has been flat for decades, while China is very much on a steep upward trajectory.

Now, we can argue whether it’s total or per capita generation that matters.

If it’s about the living standards of individuals, per capita makes more sense. A country could use a lot of electricity but still have most people living in energy poverty if it has a large population. If it’s about industrial capacity or dominance, total electricity is more revealing: your ability to dominate global solar panel or battery markets, robotics or other manufacturing sectors, is about how much stuff you can build and sell, not how much you can do per person.

Nonetheless, let’s say these per capita comparisons do matter. America’s dominance is not as stark as these electricity-per-person figures first suggest. That’s because the US and China use electricity for very different things. The US uses most of its electricity in households and commercial services; China uses most of it for industry.

Here is the comparison of industrial electricity use per capita. The main source of this data is the International Energy Agency (IEA).1 You will notice that the US is shown twice: one line using the IEA data, and another using the US Energy Information Administration (EIA) for comparison. I’ll explain why I’ve done this in the footnote.2

Per person, China consumes slightly more industrial electricity than the US, and again, its trajectory looks very different. Both use more than the European Union.

The big per capita gap between the US and China comes from the residential sector. Per person, Americans use more than four times as much as the Chinese at home.

The difference in electricity allocation is really stark when we look at all of these sectors together.3

China’s huge growth in electricity demand is really about industrial capacity.4 It not only uses far more than the US in absolute terms, but it also matches it on a per capita basis.

This story is hidden in the raw per capita comparisons that everyone shares as a rebuttal to Musk’s (and others’) argument at the top.

After looking at the other sectoral data, this drop happens alongside a substantial rise in electricity use in the “Other end use” category. I think there is a reclassification of some industrial electricity in the US in the IEA dataset around this time, which leads to some odd results.

Cover photo:  Source