China's strong power capacity fuels AI boom

As artificial intelligence evolves into a core driver of global industrial competition, China's strong power supply system and its forward-looking computing-electricity synergy strategy will give it an unparalleled edge in rolling out AI infrastructure, according to experts, corporate executives and on-the-ground evidence.

Zhang Qin, former deputy chairman of the China Association for Science and Technology and fellow of International Academy of Artificial Intelligence Sciences, said that "AI is creating an explosive demand for energy, and the solution lies in safe, reliable and green power. China has great strength in that area".

"Apart from solar and wind power, nuclear energy can also be a crucial power supply for data centers if safety is guaranteed. This is a technological frontier to be conquered rather than a barrier to AI adoption," Zhang told China Daily on the sidelines of the recent World Internet of Things Top 500 Summit in Beijing.

The comments came as China embraces AI with open arms. The value of its core AI industries exceeded 1.2 trillion yuan ($177 billion) last year, maintaining annual growth of more than 20 percent for several consecutive years, according to the Ministry of Industry and Information Technology.

Furthermore, the country is turning AI into real-world applications and a driver of economic growth. In the first half of this year, China's industrial output of AI-related sectors, including integrated circuit manufacturing and in-vehicle intelligent equipment manufacturing, grew more than 30 percent year-on-year.

Wei Zhigang, chairman of CNNC Hainan Nuclear Power Co, said that as AI triggers unprecedented global demand for computing power, "the ultimate constraint has become clear: the need for vast, stable electricity supplies".

Tech giants such as Microsoft and Google are actively exploring small modular nuclear reactors, or SMRs, to power AI data centers.

Wei added that CNNC's Linglong One — the world's first onshore commercial SMR — is nearing completion, and the company plans to begin commercial operations later this year. One key advantage of SMRs, Wei said, is their flexible placement, allowing them to be deployed right where computing power is needed, enabling close load-matching.

Zhou Ji, a senior researcher at market consultancy Pangoal, said that "China's energy system has an edge in three dimensions: scale, structure and system, which constitutes solid support for AI computing infrastructure at the foundational level".

Regarding scale, China ranks first in the world in total electricity generation and also leads in incremental growth. In terms of structure, the country has the world's largest installed capacity of new energy, with the share of green power continuing to rise, Zhou said.

As for system, China's ultra-high-voltage grid technology enables cross-regional optimization of power resources, while the country is also adopting a pioneering approach that aligns computing infrastructure with clean energy sources, he added.

Power strain

Looking ahead, the Beijing Institute of Technology's Center for Energy and Environmental Policy Research projected that by 2030, China's data centers will consume about 525.76 billion kilowatt-hours of electricity, accounting for 4.8 percent of the country's total societal electricity use.

In the United States, meanwhile, the amount of electricity consumed by data centers is expected to cause significant tightening across the national power market.

That strain is already feeding through to the real economy, as big tech data centers are driving up power bills for manufacturers across the US Rust Belt, Reuters reported. For example, the Belden Brick Co in Sugarcreek, Ohio, a 141-year-old enterprise, saw its electricity costs surge 90 percent last year, largely due to rising power demand from regional data centers.

China, by contrast, is taking a coordinated, long-term approach. Wang Hongzhi, head of the National Energy Administration, has said that China's energy system will become significantly more secure, resilient and structurally optimized by 2030, driven by over 20 trillion yuan in planned investments for key energy projects and emerging sectors.

To accommodate the surging electricity demand driven by AI, Wang said China will closely align national computing hubs with large renewable bases in the western regions, advancing the synergy between computing and electricity, while simultaneously promoting distributed power, microgrids and virtual power plants to meet localized computing needs.

A virtual power plant is a network of small, distributed energy resources, such as solar panels and electric vehicle chargers, that are connected and managed as one.

Song Yunbo, chief sustainability officer of GCL Group, a major Chinese new energy company, said that China "already generates over one-third of its electricity from renewables — a global leader — and the country's energy surplus makes it an ideal testing ground for AI-driven applications".

Miao Qing, chairwoman of Yingli Group, another Chinese new energy company, said AI-powered virtual power plants are reshaping electricity systems by aggregating distributed renewables, storage and flexible loads to smooth peaks and valleys while dynamically responding to real-time market prices.

Miao said China has already built more than 530 virtual power plants, and the prospects for wider application are "very promising".