Energy sector tops milestones in 2025

China's energy sector reached a historic milestone in 2025, characterized by record-breaking oil and gas production, and a green energy output that now exceeds the total electricity consumption of the European Union, State energy officials said on Friday.

The year 2025 marked the most successful period for energy security and supply since the start of the 14th Five-Year Plan (2021-25), according to Xing Yiteng, deputy director-general of the department of development and planning of the National Energy Administration.

Domestic crude oil and natural gas production hit all-time highs, growing 1.5 percent and 6.2 percent, respectively, while coal production remained stable with a 1.2 percent year-on-year increase, he said during a news conference held in Beijing on Friday.

According to Xing, the pace of China's low-carbon transition accelerated sharply, with cumulative renewable capacity currently surpassing 1.8 billion kilowatts. Consequently, renewable generation reached approximately 4 trillion kilowatt-hours (kWh) — surpassing the total electricity demand of the 27 EU member states, which stands at roughly 3.8 trillion kWh.

"The complementarity of the power system has been continuously enhanced by the commissioning of several ultra-high voltage DC transmission projects," Xing said.

The energy storage sector also saw explosive growth as Beijing seeks to stabilize its increasingly volatile grid. Bian Guangqi, deputy director-general of the NEA's science and technology department, said that new energy storage capacity surged 84 percent compared to the end of 2024.

By the end of 2025, China's operational energy storage capacity had reached 136 million kW (351 million kWh), a more than 40-fold increase since 2020, he said.

While North China remains the hub, accounting for 32.5 percent of installations, lithium-ion batteries remain dominant at 96.1 percent, though compressed air and liquid flow batteries are beginning to gain a footprint.

Large-scale projects (100MW and above) now represent 72 percent of total capacity, he said.

China's power market also hit new levels of liberalization, with 6.64 trillion kWh traded in 2025, a 7.4 percent increase. Market-based transactions now account for 64 percent of total social electricity consumption, meaning two out of every three kilowatt-hours in China are now traded through market mechanisms.

The surge was driven by the near-total coverage of provincial spot markets and the full participation of renewable energy sources in the trading system. The most significant growth, however, was seen in green power trading, which skyrocketed 38.3 percent year-on-year to 328.5 billion kWh.

Long-term Power Purchase Agreements reached 60 billion kWh, while new cross-regional mechanisms allowed industrial hubs to directly source green energy from resource-rich regions for the first time.

According to the administration, China's energy investment also surged in 2025, with total capital expenditure on key projects exceeding 3.5 trillion yuan ($503.6 billion) for the first time.

This represents a year-on-year increase of nearly 11 percent, a growth rate that significantly outpaced other major economic sectors, surpassing infrastructure and manufacturing investment growth by 12.9 and 10.1 percentage points, respectively, said Xing.

Within the renewable energy landscape, onshore wind emerged as a standout performer, with investment in key projects skyrocketing by nearly 50 percent year-on-year, he said.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said this rapid expansion underscores the sector's central role in China's broader energy transition.

The massive influx of capital into wind infrastructure is effectively bridging the gap between national climate goals and the urgent need for scalable, domestic energy security, he said.

Private enterprises also demonstrated significant momentum, with their investment in key energy projects growing by 12.9 percent, outperforming the national average by approximately 2 percentage points, said Xing.