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(Bloomberg) — China’s rising electricity demand will keep pressure on the nation’s power sector, according to the world’s largest utility, despite installations of generation capacity hitting a fresh high this year.

“Power supply and demand will be tight during local peak hours,” the research institute of State Grid Corp. of China — which supplies about 1.1 billion customers — said in a report.   

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Electricity consumption will climb 6.5% from 2023 as traditional industries continue to expand and on additional needs from data centers, 5G infrastructure and battery-powered vehicles, the report showed. Demand in the first four months of the year jumped 9% to 3.08 trillion kilowatt-hours, according to the National Energy Administration.

Installations of new capacity will rise 9.4% to a record this year as the volume of new hydropower increases more than a third, and as extra wind and nuclear plants are added, State Grid said.

Solar will set another annual record with the addition of 240 gigawatts, although the rate of expansion will slow from 2023, when China fitted more panels in one year than the US had installed in its history.

Read More: China Added More Solar Power in 2023 Than US Has Ever Built

Even though operators increased spending on their networks by a quarter in the first four months of this year, grids are struggling to handle increasing amounts of intermittent solar energy, slowing the boom in the renewable power source.

Though installations of new thermal power capacity are forecast to fall, coal consumption is likely to rise 1% this year, the utility said. Other forecasters, including the International Energy Agency, previously said demand for the fossil fuel in China would decline this year. 

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