China, leader in renewable energy in 2025?

China, whose industrial and economic development has long relied on fossil fuels, particularly coal, is transforming its energy model and becoming a leader in the field of renewable energy. This expansion of clean energy and the simultaneous reduction of dependence on fossil fuels are based on massive investments and innovations.

Ambitious renewable energy targets

By the end of 2025, China has set itself several major objectives as part of its 14th five-year plan aimed at establishing its dominance in the clean energy sector worldwide:

• To achieve 20% of its energy consumption from non-fossil sources. This objective marks an acceleration towards a cleaner energy mix in line with international climate commitments.
• Massively increase solar and wind capacity. With 887 GW of solar capacity and 521 GW of wind capacity, the country has already exceeded its target of at least 1200 GW of solar and wind capacity by 2030. In 2024, with more than 356 GW of new installed capacity (277 gigawatts (GW) in solar capacity and 80 GW of new wind capacity), China is well ahead of the European Union and demonstrating its commitment to renewable energy. By the end of 2025, 371 GW more should be commissioned.
• Reducing coal consumption: China wants to reduce its dependence on fossil fuels in its energy mix.
• Developing green hydrogen. The country aims to achieve an annual production of 100,000 to 200,000 tons of green hydrogen and deploy 50,000 hydrogen-powered vehicles by the end of 2025.
• Strengthen nuclear capacity. China plans to reach 70 GW of nuclear capacity, an increase of 40% over five years.
• Increase energy storage capacity. More than 30 GW will be added to optimize the management of renewable energies.

An energy transition fraught with pitfalls

While China has strong climate ambitions, several challenges must be met to achieve this energy transition.

1. Chinese electricity production still dependent on coal

Despite massive investment in renewables, coal still accounts for a very large share of Chinese electricity production. In 2024, a program to build new coal-fired power plants with a total capacity of 94.5 gigawatts (GW) was launched in China. This program is the largest launched since 2015 and accounts for 95% of new coal-fired power plants worldwide. Despite this, in the first half of 2024, building permits for coal-fired power plants fell by 83% and China. Nevertheless, gradual reduction remains a complex challenge. The challenge is to ensure a transition without disrupting the country’s energy stability.

2. Striking a balance between economic growth and emissions reduction

China must maintain strong economic growth while reducing its CO₂ emissions. The country aims to peak emissions before 2030 and achieve carbon neutrality by 2060. This is a considerable challenge that involves transforming certain sectors such as heavy industry and transportation. It is also a question of improving energy efficiency, as many Chinese industries need to be modernized to reduce their energy needs.

3. Securing the energy supply

As the world’s leading oil importer and a major consumer of natural gas, China remains vulnerable to geopolitical tensions and fluctuations in energy prices. Increasing energy independence through the development of renewables and nuclear power is a priority.

4. Integrating renewable energies into the Chinese electricity grid

With such rapid growth in wind and solar capacity, adapting the electricity grid is becoming a strategic issue. The intermittency of renewables poses management challenges that require storage solutions and infrastructure modernization.

5. Pollution and the transition of Chinese cities

The fight against air pollution in Chinese cities, mainly due to the use of coal, is a major health and environmental challenge. China’s major cities must accelerate their energy transition by developing clean transportation, reducing the use of coal and improving the energy efficiency of buildings. These efforts should enable China to reduce its energy needs and improve air quality in Chinese cities.

The economic impacts of the energy transition in China

The Chinese energy transition is not limited to an ecological transformation: it is also profoundly redefining the country’s economy. With investments estimated at between 14,000 and 17,000 billion dollars by 2060, China is betting on green infrastructure and clean technologies to maintain its growth. This transformation is accompanied by a massive reallocation of resources, favoring innovation and domestic consumption to the detriment of fossil industries.

Among the main economic impacts of this transition are:

• Creation of green jobs: in 2022, there were already more than 54 million green jobs in China, including 4 million in renewable energies.
• Opportunities for innovation: the transition favors the development of new technologies, particularly in energy storage and carbon capture.
• New growth drivers: by becoming a world leader in renewable energy, China is diversifying its economy and strengthening its influence on international markets.
• Development of green finance: Beijing is accelerating sustainable investment to finance this transition and minimize economic risks.

China, leader in renewable energy?

China is seeking to reduce its dependence on fossil fuels, while stimulating its growth through clean technologies. With record investments and exponential growth in its renewable energy capacity, China is pursuing its energy transition efforts.

VVR International supports international companies in the energy transition sector in China

In the Chinese renewable energy sector, in-depth knowledge of local dynamics, public policies, regulations and key partners is necessary to seize development opportunities. It is in this context that VVR International has been supporting international companies wishing to develop in China for more than 26 years. Our teams, based in China and France, support players in the renewable energy sector – equipment manufacturers, technology solution providers, project developers – in defining their establishment strategy, searching for reliable partners, analyzing the regulatory framework and the operational management of their development projects in China.

Sources:

• In China, the worrying revival of coal
• China wants to accelerate renewables in the face of climate change
• Social reactions to environmental challenges in China – Géoconfluences
• China’s transition to a low-carbon economy and climate resilience requires a different use of resources and technologies