By the ChinaCoalWatcher's calculations, China now consumes 25% of the world's coal production in its power plants.  But that's old news you say, we already knew from BP that China consumes 40% of the world's coal (and will likely consume 50% by 2010). 

True, but it had been using about half of that coal to make cement and steel - vital both to the construction of internal infrastructure and as materials for export or finished goods.  What the new numbers show is that electricity is the new driving force behind China's surging coal use - and they are just getting started.  Goldman Sachs recently raised their outlook on Huaneng Power - China's largest power producer - on predictions domestic electricity demand will continue to grow rapidly for many years.

The Chinese coal price has been rising as a result of insatiable demand and is up about 10% this year. So Chinese power companies, unable to raise rates without government approval despite higher costs (like their US counterparts), have been begging Beijing for a price hike.  So far, no dice! Governments hate to raise prices, because it means they, as opposed to the power companies, will be blamed - but keeping prices low is counterproductive.  Beijing is desperately trying to cool it's economy and energy usage, but lower-than-cost prices will only artificially enhance electricity demand, with a corresponding need for more coal.

From The International Herald Tribune:

Coal consumption by China's power companies soared nearly 18 percent in the first half of this year from a year ago, a state news agency said Wednesday, despite rising concern about pollution and efforts to promote cleaner energy sources.

Chinese utilities burned a total of 591 million tons of coal in January-June, the Xinhua News Agency said, citing the official power industry association, the China Electricity Council.