Carbon Peaking and Carbon Neutrality China's Plans and Solutions

II. Notable Progress in Green and Low-Carbon Energy Transition

Energy is the force that drives the progress of human civilization. It affects both daily life and national security and stability. Energy consumption is the major source of carbon emissions, while green and low-carbon energy transition is the key to realizing the goals of achieving peak carbon dioxide emissions and carbon neutrality. Proceeding from its basic reality and development stage and conditional on ensuring energy security, China has taken vigorous measures to substitute renewables for fossil fuels and promoted a new energy and power system. This provides strong support for achieving the dual carbon goals.

1. The Surging Development of Non-Fossil Energy

China is committed to the principle of establishing the new before decommissioning the old. Great prominence has been given to non-fossil energy. As a result, China has achieved new energy development on the largest scale and at the fastest speed in the world. The percentage of nonfossil energy consumption increased from 16.0 percent in 2020 to 19.8 percent in 2024.

Vigorously developing wind and photovoltaic power. China emphasizes both centralized and distributed power generation. It is actively promoting the construction of large-scale wind and photovoltaic power bases on infertile and rocky terrain and in deserts, steadily developing offshore wind farms, actively promoting rooftop photovoltaic power generation in urban and rural areas, and encouraging distributed wind power generation in rural areas. By the end of August 2025, the installed capacity of wind and photovoltaic power had surpassed 1,690 GW, triple that of 2020 and accounting for about 80 percent of the newly installed power generation capacity since 2020. The percentage of wind and photovoltaic power is steadily increasing at an average annual rate of 2.2 percentage points.

Developing hydropower as conditions permit. Hydropower is an important source of clean energy and provides a flexible supply of electricity in western China. Sound measures have been taken to coordinate hydropower development and eco-environmental conservation and integrate the development of wind, photovoltaic and hydropower. China is making active yet prudent efforts to construct critical hydropower projects on major rivers in the southwest, and to develop and build pumped-storage hydroelectric plants. By the end of August 2025, the regular installed hydropower capacity in China stood at around 380 GW, and that of pumped-storage hydropower stations at about 62.37 GW.

Pursuing robust, safe and orderly development of nuclear power. Nuclear power is an efficient and high-quality clean energy source. China is committed to developing nuclear power with the absolute requirement that safety is guaranteed, and to promoting the use of nuclear energy in clean heating, industrial heating, and seawater desalination. By the end of August 2025, China had 112 nuclear power units in operation, under construction, or approved for construction, with a combined installed capacity of 125 GW, ranking first globally. The strictest safety standards and regulations have made China a world leader in the safe operation of nuclear power.

Boosting the development of green hydrogen, biomass, geothermal and ocean energy. China is committed to the strategy of innovation-driven development. It actively promotes the whole-chain development of hydrogen in production, storage, transport and application, and is accelerating the cultivation of new products, new business forms, and new models. By the end of 2024, China led the world in the annual production capacity of green hydrogen energy — over 150,000 tonnes. China has diversified the exploration and utilization of biomass energy in accordance with local conditions. It is steadily advancing electricity generation from agricultural and forestry biomass, biogas, and urban domestic waste incineration. It is also promoting the use of biomass energy for clean heating, and the application of clean liquid fuels, such as bioethanol and biodiesel. By the end of August 2025, the installed capacity of biomass power generation had reached 46.88 GW, a 60 percent increase over 2020. In addition, China has built a series of centralized heating projects powered by geothermal energy. It is also reinforcing pilot demonstrations on harnessing ocean power such as tidal and wave energy. Progress has been made in the large-scale utilization of ocean energy.

2. Accelerating Clean and Efficient Utilization of Fossil Energy

China has continued to improve the clean and efficient utilization of fossil energy and rationally control its consumption. The proportion of fossil energy consumed dropped from 84.0 percent in 2020 to 80.2 percent in 2024.

Promoting clean and efficient use of coal, reducing its consumption, and replacing it with alternative energy resources. Based on its energy and resource endowment with coal as the mainstay, China is making coordinated progress in the stable supply of coal and low-carbon transition. It has intensified its efforts to develop eco-friendly and intelligent mines, and to reduce carbon emissions in the mining process. Measures have been taken to realize the energy-saving and low-carbon transformation of coal-fired power units and phase out outdated production capacity in the coal-fired power industry. Over the past decade, more than 100 GW of outdated production capacity has been phased out. China has also intensified its effort to reduce coal consumption and replace it with alternative energy resources in key industries and sectors. It is increasing the proportion of clean energy and the rate of electrification in the industrial sector, and replacing bulk coal with clean energy in a steady and orderly manner. The proportion of coal in China's total energy consumption dropped from 56.7 percent in 2020 to 53.2 percent in 2024.

Advancing the green transition of oil and gas exploitation and utilization. China has fully implemented green production of oil and gas across the country. It is promoting the construction of green oil and gas fields and advancing the transformation and upgrading of crude oil refining and petrochemical industry, thereby realizing energy savings and reducing carbon emissions in the production process. It has accelerated replacement of traditional fuels with advanced biomass liquid fuels and sustainable aviation fuels. It has launched campaigns to upgrade the quality of refined oil products. In less than 10 years, the quality of refined oil has been upgraded by three levels, from Level III to Level VI, which took developed countries almost 30 years. As a result, vehicle exhaust emissions have been effectively reduced.

3. Greater Regulation Capacity of the Power System

With the large-scale development of new energy, China has substantially improved the reliability and resilience of its power system. It is now accelerating the construction of a new-type power system that is clean and low-carbon, secure and sufficient, economic and efficient, flexible and intelligent, and well-coordinated between supply and demand. It is integrating the development of power source-grid-load-storage, achieving large-scale development and application of renewable energy.

Improving the coordination and operation capacity of power sources. China takes full advantage of the flexibility of coal power, and is upgrading coal-fired power units to achieve flexible load regulation. More than 50 percent of coal-fired power units in China are now equipped with deep peak-shaving technologies. China is also building peak-shaving natural gas power stations, pumped-storage hydroelectric plants, and solar power plants adapted to local conditions, and increasing large-scale use of new power storage technologies. In addition, it is steadily achieving dispatch optimization through multi-energy complementarity on the power supply side and fully tapping the potential for peak-shaving. As a result, the safe operation and comprehensive regulation capabilities of the power system have greatly improved.

Strengthening complementarity and mutual assistance between power grids. China has implemented innovations to the structure, form, and operation mode of power grids, made them smarter, and adapted them to large-scale centralized new energy resources and distributed energy with vast volume and wide coverage. It has consolidated the physical foundations of a stable power system by improving the main framework of the power grid. An interconnected and mutually complementary power grid system covering six regions has been set up, substantially increasing the power allocation capacity across provinces and regions. In 2024, the amount of electricity transmitted across regions and provinces reached 924.7 TWh and 2,000 TWh respectively, up by 50 percent and 30 percent compared with 2020. The power distribution network has been upgraded to increase the capacity to accommodate new energy power. China is also actively developing smart microgrids, mainly for absorbing new energy to achieve compatibility and complementarity with the main power grids.

Promoting electricity load flexibility. China systematically integrates the resources of demand response, guides users to optimize their electricity storage and consumption mode, and releases a high proportion of electricity load flexibility for residents and general industry and commerce. Considering the high proportion of industrial electricity load, China encourages enterprises with high electricity loads to participate in the ancillary service market, increasing the demand response capacity and making the power system more flexible. The goal is to have the demand response capability account for 3 to 5 percent of the maximum electricity load by 2025, with that in eastern, central, and southern China reaching 5 percent.

Strengthening new types of energy storage. Energy storage is an important foundation for a new-type power system. China is integrating energy storage in all the stages of the power system. It is developing "new energy + energy storage", and integrating power source-grid-load-storage, as well as multi-energy complementarity. With a focus on key grid nodes or remote areas, it is establishing rational new energy storage configurations. It also encourages electric vehicles and uninterruptible power supplies to participate in system peak shaving and frequency regulation, and promotes the diversified application of technologies, including lithium-ion batteries, flow batteries, compressed air energy storage, gravity energy storage, and flywheel energy storage. By the end of 2024, the installed capacity of new energy storage had reached 73.76 GW/168 GWh. This is 20 times the capacity in 2020, and represents more than 40 percent of the global total.