AI rewiring how China's energy is managed

To generate a mere five-second, high-definition video out of the digital space — perhaps a lifelike sunset or a virtual city street — an artificial intelligence model does not simply crunch numbers; it guzzles electrons.

Producing those few fleeting seconds of digital reverie requires roughly the same amount of electricity as fully charging 10 smartphones, said Wang Hongzhi, head of the National Energy Administration.

"The AI boom is triggering a ravenous new appetite for electricity," Wang said.

In China, the AI sector is expanding at a breakneck pace. Projected to surpass a valuation of 10 trillion yuan ($1.48 trillion) by the end of the decade, the industry's explosive boom in computing power is driving a precipitous spike in power consumption.

The government is confronting this colossal appetite head-on. Yet, rather than merely throwing more coal into the furnace, Chinese planners are orchestrating an intricate, nationwide symbiosis between the machines that think and the grid that feeds them.

To prevent the AI boom from short-circuiting the nation's climate goals, Beijing is effectively redrawing its infrastructural map, which Wang describes as "powering computing with electricity and promoting electricity with computing".

In the sun-drenched, wind-swept expanses of the western provinces, national computing hubs are being deliberately tethered to colossal new renewable energy bases, while in the densely populated east, planners are nesting distributed computing facilities alongside local microgrids and virtual power plants so that data centers can scavenge power close to the source.

The government is also actively encouraging data centers to plug directly into green power and participate in green electricity trading, said Wang.

Conversely, delay-tolerant tasks — the massive, slow-cooking data-training runs — are nudged to operate during off-peak hours. This essentially uses the data centers as massive, flexible shock absorbers to balance the grid, he said.

But this relationship, Wang said, is far from a one-way street. While the power grid fuels the rise of algorithms, the algorithms are, in turn, rewiring how the nation's energy is managed.

The two industries have entered a fast lane of mutual empowerment, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

While AI operations do consume a substantial amount of power, the technology has been acting as the nervous system for an increasingly complex energy landscape — optimizing grid operations, smoothing out renewable energy volatility and ultimately driving broader energy efficiency, Lin said.

In the petroleum sector for example, a large model known as "Kunlun" has accelerated the computational efficiency of oil and gas exploration by more than tenfold, cutting through geological guesswork to optimize drilling strategies, said Wang.

Operated by China National Petroleum Corp, the upgraded platform marks a crucial leap from passive question-answering to "active intelligence", allowing the AI to autonomously plan, dispatch tools, analyze data and execute tasks across the production line.

As the first large model in the domestic energy and chemical industry to achieve large-scale, full-chain application, Kunlun — currently deployed across 152 scenarios — boasts a drilling risk warning system with an accuracy rate exceeding 85 percent, issuing over 300 early warnings in the past six months to prevent accidents, CNPC said.

Ye Xiaoning, a senior engineer at the State Grid Energy Research Institute, said AI is proving to be the perfect antidote to the inherent chaos of renewable energy.

As immense volumes of wind and solar power flood the national grid, the system becomes jittery, subject to the whims of passing clouds and dying breezes, he said.

Here, an AI model dubbed "Yudian" acts as a tireless dispatcher. It predicts weather-driven fluctuations in real time and dynamically adjusts the grid to ensure that no clean energy goes to waste.

This intelligence is also moving from the control room out into the field, graduating from merely offering diagnostic advice to executing autonomous operations.

When a fault occurs in the power distribution network, an AI model called "Guangming Power" steps in like an attending physician. It senses line anomalies, pinpoints the exact location of a failure and coordinates intelligent repairs without waiting for human intervention.

Ultimately, it is a bold blueprint for an engineered feedback loop. The algorithms will consume the sun and the wind to grow smarter, and, in their newfound brilliance, they will figure out how to harness the Earth's elements ever more perfectly.

AI systems need an ocean of electricity to keep expanding. Over the last 10 years, China has built a colossal power grid perfectly scaled to power these machines.

By the end of May, China's total installed power generation capacity reached 4.01 billion kilowatts. To put that figure in perspective, it exceeds the combined power capacities of the United States, the European Union, India, Japan and Russia.

The pace of this expansion is compounding at a dizzying rate. It took the country eight years to double its capacity from 1 billion kW in 2011 to 2 billion kW in 2019. Reaching the 3-billion-kW mark took five years, achieved in April 2024. Adding this latest billion took a mere two years.

Overall, between 2010 and 2025, China's power generation capacity maintained an average annual growth rate of 9.7 percent — eclipsing the equivalent rates of the US (1.7 percent) and the EU (3.2 percent).

Industry experts view this hyper-growth as a testament to the country's formidable manufacturing base. Jiang Debin, deputy director of the statistics and data center at the China Electricity Council, said the fundamental driver behind this acceleration is the explosive rise of renewable energy, primarily solar and wind.

"This not only illustrates the continuous improvement in the efficiency and scale of China's power grid expansion, but also reflects the comprehensive advantages of the country's manufacturing system, engineering prowess and institutional mechanisms," Jiang said.

In an era where geopolitical conflicts have triggered energy shortages and price spikes globally, China has managed to keep its lights brightly on.

As the electricity demand of emerging sectors — particularly AI and high-end manufacturing — continues to surge, this massive 4-billion-kW foundation provides ironclad energy security for the nation's broader economic ambitions, said Jiang.

Crucially, this is not just a story of scale, but of transformation. The rapid expansion has been overwhelmingly driven by a structural shift toward clean energy.

Consequently, the national energy mix has been radically reconfigured. In the first half, China's coal-fired power generation totaled 2.5 trillion kilowatt-hours, accounting for less than 50 percent of the nation's total electricity output for the first time, said the NEA.

The installed capacity of renewable energy has been steadily expanding. In the first half, the country added 117 million kW of renewable energy capacity, accounting for 73.9 percent of all newly installed capacity. As of the end of June, the nation's total installed renewable energy capacity reached 2.46 billion kW, accounting for approximately 60.7 percent of China's total installed capacity.

Renewable energy electricity generation has also risen steadily. In the first half, national renewable energy power generation reached nearly 2 trillion kWh, an increase of about 9 percent year-on-year, accounting for 41.2 percent of total electricity generation, an official of the NEA said on Thursday.

This green revolution is underpinned by brutal, brilliant economics. Over the past decade, solar module prices have plummeted by more than 90 percent, while onshore wind generation costs have fallen to match or undercut coal. Driven by technological advancements and economies of scale, renewable energy has evolved from a heavily subsidized experiment into a fiercely profitable sector.

China boasts the world's most comprehensive renewable equipment supply chain, manufacturing about 80 percent of global solar modules and 60 percent of wind power equipment.

The accelerated rollout of supporting infrastructure — including ultra-high-voltage transmission lines, pumped hydro and new energy storage systems — ensures that massive new capacity can be effectively built, transmitted and absorbed by the grid, said Jiang.

Now, this staggering capacity is beginning to spill over China's borders. Leveraging its robust grid infrastructure, the country has steadily expanded power interconnectivity with neighboring countries — particularly in Southeast Asia — helping to alleviate regional power shortages while sharing its green energy dividends.

The China-Laos 500-kilovolt power interconnection project, for example, which marks the first time that foreign new-energy electricity has participated in China's marketized power trading system, had delivered nearly 200 million kWh by the end of May, demonstrating the massive potential of cross-border solar infrastructure.

As the largest cross-border grid project and the highest-voltage power link between China and Laos, the project is expected to transmit roughly 1.1 billion kWh of solar-generated electricity to China this year alone, said its operator China General Nuclear Power Group.

As industry experts note, China's most significant export extends far beyond raw electricity.

"The same industrial ecosystem that built this 4-billion-kW leviathan is now exporting complete, turnkey green energy solutions — advanced solar, wind and smart-grid technologies," said Jiang from the CEC. "This is positioning the country as an indispensable engine of the global energy transition."