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China has announced plans to develop major renewable energy projects as part of its strategy to peak carbon emissions before 2030 and achieve carbon neutrality by 2060. The National Development and Reform Commission (NRDC) will prioritise offshore wind farms and “new energy bases” in desert regions. A hydropower facility on the Yarlung Tsangpo River in Tibet and a power transmission route linking Tibet with Hong Kong, Macao and Guangdong are also proposed. However, coal production will continue to rise despite efforts to trial low-carbon technologies. China’s carbon intensity reduction of 3.4% in 2024 fell short of its five-year target of 18% by 2025. (Reuters)
Why does this matter? China already leads the world in renewables. Last year, it again set new records for wind and solar power installations, with solar capacity rising 45.2% to 886.67 GW and wind increasing 18% to 520 GW. The rapid expansion saw it reach its 2030 clean energy target six years ahead of schedule. Total installed power capacity grew 14.6% YoY to 3.35 billion KW. However, due to China’s heavy reliance on coal, accounting for 53% of the energy mix in 2024, the country remains the world’s largest CO2 emitter, responsible for 35% of net emissions.
China’s energy consumption is rising rapidly, outpacing overall economic growth since 2020. In 2024, consumption increased by 7% and is projected to grow at an average rate of 6% annually through 2027. The surge is driven partly by the industrial sector, with energy-intensive industries and the expanding production of solar panels, batteries, electric vehicles (EVs) and related materials playing a key role. Other factors include rising air conditioning use, increased EV adoption and the growing energy needs of data centres and 5G networks. As such, the country must ramp up its power capacity and phasing out coal in favour of renewables is critical for meeting demand while achieving its environmental goals.
However, coal looks set to remain part of China’s energy mix for some time to come. Last year, it approved 66.7 GW of new coal-fired capacity, began construction on 94.5 GW –the highest in a single year since 2015 – and resumed work on 3.3 GW of previously suspended projects, according to a report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor. Moreover, in the later part of the year, the use of wind and solar unexpectedly declined, which could not be attributed to weather conditions. CREA analyst Qi Qin said the cutbacks were primarily driven by long-term power purchase agreements, which require local governments to buy minimum quotas of coal-generated electricity. Such commitments could hold back China’s ambitious renewable energy plans.
Another issue China faces is the construction of the Yarlung Tsangpo Hydroelectric Project, which was approved last December. If it goes ahead, it will become the world’s largest hydropower dam, generating three times more than the Three Gorges Dam and costing up to CNY1tn ($138bn). Although Chinese state media claim it will prioritise ecological protection and boost local prosperity, critics warn of potential displacement of Tibetan communities and severe downstream impacts on India and Bangladesh. The dam is also located in an earthquake-prone region, and researchers argue construction could increase the frequency of landslides. Experts also fear it may allow China to control river flows into neighbouring countries, heightening geopolitical tensions in South Asia.