Balancing green power, grid stability

Driven by the surging electricity demands of high-end manufacturing and a rapidly expanding digital economy, China's energy landscape is witnessing a historic paradigm shift.

Solar power capacity is on track to officially surpass coal-fired capacity in the third quarter, driven by an explosive surge in electricity demand from new quality productive forces such as high-end manufacturing, artificial intelligence and electric vehicle infrastructure.

According to a comprehensive mid-year report released by the China Electricity Council, the nation's power sector is accelerating its green and low-carbon transition during the 15th Five-Year Plan period (2026-30), entering a new stage characterized by scaled-up quality and systemic modernization.

China's total installed power generation capacity reached 4.01 billion kilowatts by the end of May, making it the first country to cross the 4-billion-kW threshold, said the CEC's recently released report on the analysis and forecast of the national electricity supply and demand situation in the first half.

By the end of June, total solar power capacity had caught up with coal, effectively tying it as the country's largest power source. New energy sources have now firmly established themselves as the undisputed main body of newly added power capacity, the CEC said.

"In the first half, total nonfossil energy power generation grew by 8.5 percent year-on-year, accounting for 44.5 percent of total power generation — an increase of 1.4 percentage points from the same period last year," said Hou Wenjie, director of the statistics and data intelligence department at the CEC. "More remarkably, the incremental growth of nonfossil energy power generation accounted for 70.7 percent of the total incremental power generation nationwide."

Conversely, traditional fossil fuels are seeing their dominance wane. Coal-fired power generation accounted for 49.7 percent of total power generation in the first half, dropping below the 50 percent mark for the first time in the nation's modern industrial history, Hou added.

Industry experts believe that China's installed power structure is seamlessly continuing its green and low-carbon transformation, a shift that is generating immense dividends not just domestically, but also globally.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said the continuous climb in installed capacity has significantly boosted overall power generation performance.

The incremental output from nonfossil energy already accounts for 70 percent of the country's total power generation increase, Lin said.

"China's massive manufacturing scale and technological innovation have reduced the global levelized cost of solar and wind power by more than 60 percent and 80 percent, respectively, over the past decade," Lin added.

High-quality Chinese new energy products have significantly enriched global supply and accelerated the world's low-carbon transition in recent years, according to a document titled "China's Position on the So-called Excess Capacity Issue" by the Ministry of Commerce.

China's green and low-carbon transformation serves as both a vital cornerstone of its high-quality development and a landmark contribution to global sustainability, the document said.

In terms of newly installed capacity, the first half saw the nation add 160 million kW of power generation capacity. Wind and solar power combined accounted for 110 million kW of the total, representing a staggering 70 percent of all new capacity added to the grid, said the CEC.

While the supply side of the grid goes green, the demand side is undergoing an equally profound structural transformation. The CEC said electricity consumption driven by the digital and smart economy is experiencing "explosive growth".

"In recent years, China has accelerated the development of new quality productive forces," said Jiang Debin, deputy director of the statistics and data intelligence department at the CEC. "New growth drivers represented by high-end manufacturing and the digital-intelligent economy continue to expand rapidly ... The robust growth in power consumption in these related industries has become the core engine driving the overall electricity consumption growth of the entire society."

The CEC report shows that electricity consumption in high-tech and equipment manufacturing stood out remarkably in the first half, surging 9.8 percent year-on-year. The growth rate was 6 percentage points higher than that of the same period last year, contributing to 32.8 percent of the total growth in industrial electricity consumption.

Notably, every single subsector within this category recorded positive power consumption growth, the report said.

Simultaneously, within the digital economy, emerging business models — particularly internet data services such as AI data centers and EV charging and battery-swapping services — are exhibiting exponential power demand.

"In the first half, the combined monthly incremental electricity consumption of internet data services and battery swapping and charging services remained between 5.5 billion and 8.5 billion kilowatt-hours. These two sectors consistently accounted for 15 percent to 25 percent of the total societal incremental electricity consumption each month," said Jiang.

From January to June, these two sectors accounted for 59.3 percent of the total increase in electricity consumption in the tertiary industry, acting as the critical force driving that growth.

The EV sector's power appetite is particularly striking. The number of new energy vehicles on the road has surged. In the first half, the national EV charging and swapping service sector consumed 81 billion kWh. In June alone, power consumption hit 14.8 billion kWh, representing a year-on-year growth of 57.1 percent.

Internet data services are following a similar upward trajectory. The explosive boom in AI applications drove the sector's power consumption to 49.4 billion kWh in the first half, nearly matching the total consumption recorded for the entirety of 2024.

"Currently, the AI industry is shifting from a 'training-centric' phase to a phase where 'training and inference are equally important'," said Jiang. "The volume of AI token calls remains in an exponential climbing channel, meaning the related electricity consumption will continue its high-speed growth for the foreseeable future."

Overall, high-tech manufacturing, data centers and EV infrastructure are rapidly evolving from marginal contributors into the "core increment" of China's power consumption, he added.

Despite the massive strides in renewable deployment, experts warn that the transition is not without operational hurdles.

Zhang Lin, director of the planning and development department at the CEC, pointed out that new energy sources, which are inherently intermittent, have not yet formed an effective and entirely reliable substitute for traditional baseload power.

"The power system is currently facing multiple pressures encompassing security of supply, renewable consumption and economic viability," Zhang said. "There is an urgent need to enhance the reliable output, active grid support and coordinated regulation capabilities of new energy during critical periods of peak system demand."

To address this, the recently drafted plan for renewable energy development during the 15th Five-Year Plan period has, for the first time, incorporated reliable substitution and peak power generation capabilities into its target system.

The plan proposes that by 2030, the average reliable capacity value of wind and solar power should be increased to 8 percent. Furthermore, it aims to increase the share of wind and solar electricity during summer and winter evening peaks to 20 percent, and to boost the newly added reliable peak power generation capacity of renewables by 300 million kW.

"At present, achieving these targets presents certain challenges," Zhang said.

To enhance the reliable substitution capability of new energy, she urged the industry to accelerate the construction of "grid-friendly" new energy stations, while upgrading older legacy wind and solar plants, encouraging capacity expansion and the rational pairing of energy storage systems to steadily improve their grid-connection performance.

"On the technical level, we must increase research, development and application of advanced technological equipment, such as grid-forming technologies, high-precision power forecasting and integrated dispatch systems, while also significantly increasing the proportion of long-duration energy storage," Zhang said.

Looking ahead, the CEC forecasts that as new quality productive forces continue to expand, related industries will see their share of power growth in the industrial sector and the tertiary sector climb even higher, pushing China's electricity consumption structure toward a more technology-intensive and green direction.

The report projects that newly added power generation capacity for 2026 will reach 400 million kW.

By the end of this year, total installed capacity will reach approximately 4.3 billion kW. Of this, nonfossil energy capacity is expected to hit 2.7 billion kW, accounting for about 63 percent of the total. Wind and solar power will officially comprise half of the nation's total capacity, while coal power's share will shrink to roughly 31 percent, the report said.

Hou projects that total electricity consumption will grow by 5 to 6 percent year-on-year in the second half, with the maximum unified grid load reaching between 1.57 billion and 1.63 billion kW.

Looking toward 2030, the CEC anticipates a fundamentally restructured grid characterized by growth in green power and stabilization of coal power.

"By that time, the power industry will have formed a completely new paradigm where new energy serves as the main body of installed capacity, and clean energy dominates actual electricity generation," said Ye Jing, director of the power supply and demand analysis division under the CEC's statistics and data intelligence department.

Under this new framework, solar power will firmly hold its position as China's largest single power source. Concurrently, legacy coal assets will be strategically optimized. Rather than serving as traditional baseload power, coal will be relegated to a supporting role, providing vital safety backup, flexible peak shaving and gap-filling support when the sun is not shining or the wind is not blowing.

This dual approach is designed to ensure the grid can handle the explosive demand from emerging technologies without sacrificing stability.

By successfully balancing this massive green expansion with rigorous grid stability, China is actively engineering a clean, low-carbon power sector — one fully equipped to fuel the nation's next wave of technological and industrial innovation, Ye said.

zhengxin@chinadaily.com.cn