Shanxi upgrading industrial landscape

The macroeconomic backdrop of Shanxi's transition is defined by a structural shift characterized by "green expansion and coal stabilization". While China's installed renewable energy capacity has ranked first globally for consecutive years, policymakers are prioritizing grid stability.

The 15th Five-Year Plan (2026-30) features a "non-fossil energy 10-year doubling action" as a core objective. Notably, the plan also formally incorporates peak-shaving capacity into the national target metrics for the first time.

In this evolving structure, renewable energy is expanding to reduce the carbon intensity of the power sector, while coal power acts as a stabilizing force during the transition.

Liu Zhiqiang, deputy director of the China Electricity Council's planning and development department, said coal remains the "ballast stone" of China's power system's safe operation.

"While the average annual utilization hours of coal plants are trending downward to accommodate more renewables, their value in ensuring system security — such as providing rotational inertia and frequency support — has become even more prominent," he said.

A recent report by global research firm Wood Mackenzie highlights this dynamic, noting that "the strategy of leveraging coal fleets as flexible load resources, while concurrently scaling green generation, offers a practical framework for resource-rich emerging markets".

Dong Xiaoyu, executive vice-governor of Shanxi, said the province has achieved a greener energy structure, currently operating 413 intelligent coal mines, accounting for more than 30 percent of the national total.

Unconventional natural gas production has reached 75 billion cubic meters cumulatively over the past five years, supported by the completion of six large-scale gas fields, he said.

Clean power installed capacity now accounts for 55.1 percent of the province's total, officially surpassing coal power. In 2025, Shanxi recorded 40.84 million green power certificate transactions, with market-based green power trading volume reaching 10 billion kilowatt-hours, ranking among the highest in the country, Dong said.

Shanxi's industrial chain is also moving toward higher value-added operations, accelerating development in sectors such as semiconductor materials, new energy metals and electric heavy-duty trucks.

According to Dong, low-carbon concepts are already integrated into public infrastructure. The province is advancing the construction of two national-level zero-carbon industrial parks and 13 provincial-level green electricity parks. All new urban buildings are required to meet green construction standards, and clean energy vehicles now comprise 99 percent of urban buses and 98 percent of taxis province-wide, he said.

"China's unparalleled market scale and its steadfast commitment to the green transition continue to act as a powerful magnet for multinational energy companies," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University. "Despite global macroeconomic uncertainties, foreign energy giants recognize that deeper integration into China's low-carbon supply chain is no longer just an option, but a strategic necessity for their long-term global competitiveness."