Focus topics

Renewables are being expanded, fossil fuels stay

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  • To meet the official target of reaching China’s “carbon peak” by 2030 and “carbon neutrality” by 2060, the Chinese government has been pushing the expansion of solar power and wind power in recent years.​
  • Although the accumulated capacity of renewable power is only at 44.8 percent of total accumulated power capacity (end of 2021), most of the newly built power capacity comes from renewable sources (72.6 percent in 2020 and 80.4 percent in 2022).​
  • One recent policy incentive to further encourage the deployment of renewable energy: additional consumption of renewable energy will not be included in calculating the “energy consumption quota” all localities need to adhere to.​
  • Among the different renewable sources, a significant shift between solar and wind is taking place. In 2020, 25.3 percent and 37.5 percent of new power capacity were attributed to solar power and wind power respectively. In contrast, solar power contributed 46.4 percent of new power capacity in 2022 and wind now only accounts for 19.8 percent of new capacity.​
  • However, this does not mean fossil-fuel-based power is excluded from the governmental blueprint. The volatile nature of renewable power sources and the need to maintain energy security led the government to continue building new coal-based power plants, albeit at a slower pace than before.​
  • Both the absolute number and the relative share of new power capacity from non-renewable sources are shrinking (2020: 52GW and 27.4 percent, 2022: 36GW, 19.6 percent). However, non-RE power plants still constitute a crucial part of China’s power system and will continue to do so for still many years to come.​

Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.


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