China's Energy Transition

III. Moving Faster to Build a New Energy Supply System

China is committed to striking a balance between traditional and new energy sources in order to facilitate its energy transition while ensuring a stable energy supply tailored to the country’s national conditions and development stage. The country has been working to improve the reliability of non-fossil fuels as alternative energy sources and leverage the supporting and balancing role of fossil fuels, as it moves towards building a clean, diversified, secure and resilient energy supply system.

1. Promoting High-quality Development of Non-fossil Energy

Accelerating the development of non-fossil energy is a necessary step in pursuing eco-environmental progress, promoting green and low-carboneconomic and social development, and achieving the peak carbon and carbon neutrality goals. It is essential to increasing green productivity.

Realizing a boom in wind and solar PV power. China has abundant wind and solar resources, making them the predominant sources of clean energy generation in the country. Construction has been advanced in steps on large-scale wind and PV power bases centered around the Kubuqi, Ulan Buh, Tengger, and Badain Jaran deserts, expected to reach a total installed capacity of 450 GW. China has seen large-scale and cluster development of offshore wind farms, with a cumulative installed capacity of 37,280 MW. Distributed new energy production has also made rapid progress. Wind and PV energy projects have been piloted in rural areas featuring the “PV plus agriculture” models, including agrivoltaic farming, fishery-solar hybrid systems, and animal husbandry-solar solutions, which has opened up broad spaces for new energy production. By the end of 2023, China’s cumulative installed capacities of wind and PV power stood at 441 GW and 609 GW, an elevenfold increase over the past decade. The installed capacity of distributed PV power exceeded 250 GW, accounting for more than 40 percent of the total installed capacity of PV power.

Developing hydropower as conditions permit. Sound measures have been taken to coordinate hydropower development and eco-environmental conservation. Construction of large hydropower bases is underway, while existing large hydropower stations have been upgraded. By the end of 2023, the regular installed hydropower capacity in China stood at 370 GW. The green transformation and modernization of small hydropower stations have been steadily advanced, with nearly 4,000 such stations upgraded by the end of 2023 to improve their green capabilities.

Pursuing robust, safe and orderly development of nuclear power. Nuclear power is an efficient and high-quality clean energy source. China maintains that nuclear safety is essential for the development of nuclear power. The country has adopted the most advanced technologies and strictest standards to ensure that the nuclear power units in operation remain safe and stable over a long period of time. A number of coastal nuclear power projects are now in progress: The first units of the domestically developed third-generation nuclear reactor, Hualong One, have already entered operation; the Guohe One demonstration project, another independently designed third-generation nuclear reactor, is currently under construction; and the world’s first fourth-generation nuclear power plant with a high-temperature gas-cooled reactor has also officially entered commercial operation. Breakthroughs have been made in the comprehensive use of nuclear energy for clean heating and heat supply, which has expanded the scope of nuclear energy utilization. By the end of 2023, the total installed capacity of nuclear power plants in operation across China stood at 56,910 MW, 3.9 times the figure at the end of 2013. The total installed capacity of nuclear power plants under construction and in operation in China had totaled 100.33 GW by the end of 2023.

Boosting the development of biomass, geothermal and ocean energy. China has diversified the use and development of biomass energy in accordance with local conditions. It has been steadily advancing electricity generation from agricultural and forestry biomass, biogas, and urban domestic waste incineration. By the end of 2023, the installed capacity of biomass energy plants had reached 44,140 MW. In line with local conditions, China has also been promoting the use of biomass energy for clean heating and increasing the use of livestock and poultry waste to produce biogas. Additionally, it is promoting the application of clean liquid fuels such as bioethanol and biodiesel. New breakthroughs have been made in exploring mid-to-deep geothermal energy, and centralized heating projects mainly powered by geothermal energy have been built. Progress has also been made in the large-scale utilization of ocean energy.

2. Coordinating the Development of Traditional Energy and New Energy

Traditional energy and new energy constitute a relationship of complementarity and substitution. While making great efforts to boost the development of new energy, China also fully utilizes the supporting and safeguarding role of traditional energy so that new energy and traditional energy can work in synergy.

Promoting clean and efficient exploration and utilization of coal. China has established a long-term mechanism for green coal mining and built modern coal mines that are safe, intelligent and eco-friendly. It has implemented comprehensive management and ecological restoration of mining areas, resulting in continuous improvement to the eco-environment in these areas. Over the past decade, the national raw coal washing rate, the comprehensive utilization rate of mine water, and the land reclamation rate have all increased by more than 10 percentage points. The country has strengthened comprehensive management and safe utilization of coal mine gas, and the benefits of gas extraction on safe production, resource utilization, and environmental protection are increasingly visible. Over the past decade, outdated coal-fired power facilities, with a combined capacity of more than 100 GW, have been decommissioned across the country. Coordinated measures have been taken to realize energy-saving and carbon-reducing transformation of remaining coal-fired power units, increase their flexible load regulation capabilities, and upgrade their heat supply capacity. By the end of 2023, more than 95 percent of coal-fired power units had achieved ultra-low emissions, and more than 50 percent had deep peak-shaving capabilities, reducing the discharge of pollutants in the power industry by more than 90 percent.

Promoting the transition towards green oil and gas production. The annual output of crude oil has stabilized at about 200 million tonnes, and the output of natural gas has experienced an annual increase of more than 10 billion cubic meters for seven consecutive years. China has actively promoted the construction of green oil and gas fields, made significant progress in carbon capture, utilization, and storage (CCUS) technology, and built near-zero emission oil and gas demonstration areas. Additionally, the country has promoted the transformation and upgrade of its crude oil refining and petrochemicals industry, and strengthened R&D and application of technologies to produce hydrogen from renewable energy and produce chemical products through carbon dioxide hydrogenation. It has implemented sound plans to steadily upgrade the quality of refined oil and raise its light-duty vehicle emission standard from National III to National VI. It has taken China less than 10 years to upgrade the quality of its refined oil to advanced international levels, two decades quicker than in developed countries.

Coordinating the development of traditional and new energy. China has been transforming traditional energy industries into integrated energy systems. It has taken steps to implement wind-solar-hydro (plus storage) and wind-solar-coal (plus storage) hybrid systems in resource-rich areas. New energy power generation projects have been built in places such as coal mine industrial sites, coal mining subsidence areas, idle spaces at power plants, and oil and gas mining areas. By developing offshore wind farms to provide green power for oil and gas platforms, clean energy is supplied for the production, development, processing and conversion of traditional energy. The country is also working on hydrogen transportation by pipeline, and building integrated energy service stations supplying oil, gas, electricity and hydrogen on the basis of traditional oil and gas fueling stations.

3. Improving the Resilience of the Energy System

With the large-scale development of new energy and changes in power load characteristics, China’s energy and power system is facing more operational uncertainties. Therefore, it is important that the country should increase the regulation ability of the system, keep improving its capacity for safe operation and strengthening its resistance to risk.

Boosting energy network connectivity. In order to optimize the allocation of resources and increase its large-scale and long-distance energy transmission capacity, China has accelerated the construction of a cross-country energy network. It has built three west-to-east power transmission corridors across provinces and regions in northern, central, and southern China, with a capacity of about 300 GW, and has completed 20 ultra-high-voltage direct current (UHVDC) transmission channels. It has also improved the function of major regional power grids and formed a grid framework centered on a number of regional power grids, with effective interconnection between regions. A unified national pipeline network has taken shape to optimize and coordinate oil and gas allocation and supply across regions. By the end of 2023, the total length of the long-distance oil and gas pipeline network in China was about 190,000 kilometers. This includes 33,000 kilometers of crude oil pipelines, 33,000 kilometers of refined oil pipelines, and 124,000 kilometers of natural gas pipelines.

Improving energy reserves for emergency response. China has further improved its coal reserve system, with corporate reserves as the mainstay, government reserves as a supplement, and a proper combination of product reserves and capacity reserves. An oil reserve system that integrates government and corporate reserves, and develops both strategic and commercial reserves is in place. Faster progress has been made in building a multilevel natural gas storage and peak-shaving system, with local governments, gas suppliers, pipeline transportation enterprises, and urban gas services fulfilling their respective responsibilities. Over the past decade, China’s natural gas storage capacity has doubled. The country has expanded its capacity for energy emergency response by establishing a prediction and early warning mechanism, formulating emergency plans, and improving the drill system and energy dispatch mechanism to guard against emergencies.

Increasing the regulation capacity of the energy system. China has upgraded its coal-fired power units to have flexible load regulation capabilities. It has also built natural gas peak-shaving power stations and accelerated the construction of pumped-storage hydropower stations as part of the effort to diversify novel energy storage. By the end of 2023, the installed capacity of coal-fired power units with flexible load regulation capabilities was close to 700 GW, and that of pumped-storage hydropower stations 50,940 MW. The novel energy storage projects in China has a maximum output power of 31,390 MW and a total energy storage capacity of 66,870 MWh, with an average storage time of 2.1 hours. The country has strengthened complementarity and mutual assistance between grid networks and tapped into demand-side response, by means such as expanding adjustable power load and improving vehicle-to-grid (V2G) technology.