Energy industry to witness boom times

Workers install wind turbines at a wind farm project construction site in Ruichang, Jiangxi province, on Dec 19. (WEI DONGSHENG/FOR CHINA DAILY)

China's energy sector is poised for further growth this year, fueled by favorable policies that will expedite the country's shift toward renewable energy sources, even as it navigates challenges like demand-supply imbalances and trade barriers, said experts.

This growth is not only evident in increased installed capacity, but also in the utilization of renewable energy, enhanced private sector involvement in major projects, advancements in technology research and development, and the active overseas operations of businesses, they said.

In recent years, the energy sector has grappled with significant challenges stemming from a pronounced demand-supply imbalance, resulting in issues like pricing fluctuations and inventory concerns.

Therefore, a series of policies focusing on supply-side reforms in solar and wind power have been introduced since the end of 2024. Notably, the annual Central Economic Work Conference in December emphasized the establishment of a modern industrial system, calling for efforts to tackle price-centered hyper competition amid demand-supply imbalances.

"Since the latter part of the year, China has been actively driving the development and reform of the new energy sector, including supply-side reforms in solar power and demand-side reforms in wind power. By 2025, we anticipate the introduction of more new energy reforms with a growth-oriented approach," said Ken Liu, head of mainland and Hong Kong utilities and renewables research at financial services provider UBS.

Wang Peng, a professor at North China Electric Power University, projects that by 2025, China's combined wind and solar installed capacity will reach approximately 1.6 billion kilowatts. The proportion of non-fossil energy consumption is expected to surpass 21 percent by end-2025 and exceed 25 percent by 2030. In the medium term, there will be a noticeable shift toward electrification of end-use energy consumption, transitioning to electro-hydrogen combination in the long run.

"Future energy use will witness accelerated electrification across industries, construction, transportation, agriculture and other sectors, with end-use electrification levels projected to reach nearly 30 percent by 2025 and 34 percent by 2030. Electricity is poised to become the dominant end-use energy source, with hydrogen energy showing promising innovative development potential and anticipated increased role in end-use energy consumption transformation," Wang said.

He said the new energy law, effective Jan 1, also signifies a shift toward a more market-oriented approach in energy investment and operations, unlocking substantial commercial opportunities. "The country is encouraging private companies to invest in energy development, utilization, and infrastructure construction in compliance with the law. Over the next decade, investments in key energy projects are poised to remain at the trillion-yuan level."

China has made significant progress in the development of renewable energy, with the installed capacity of wind and solar power totaling 1.35 billion kW as of end-2024. This accomplishment fulfills the country's commitment made at the Climate Ambition Summit six years ahead of schedule, according to the National Energy Administration.

Newly increased renewable energy installations in China surpassed 300 million kW last year, constituting over 85 percent of all new installations, while the energy self-sufficiency rate was maintained above 80 percent, said the NEA.

At present, the national wind power installed capacity stands at around 510 million kW, and solar power installed capacity at approximately 840 million kW. Their utilization rates exceed 95 percent.