While coal continues to play a dominant role, China has simultaneously become the world’s largest investor, producer, manufacturer and deployer of renewable energy technologies.
In 2025, China’s fossil electricity generation fell by 0.9%, and its energy-related carbon dioxide (CO₂) emissions declined by around 0.5%. China achieved this while maintaining a 5% growth target for gross domestic product (GDP) through high levels of renewable energy deployment and a strong increase in energy efficiency across the economy, by more than 3% and twice as much as the rest of the world.1
China has built the world’s largest installed capacity of solar and wind power, accounting for more than 50% of global solar additions and 68% of global wind additions in 2025.4 Together, the country’s solar and wind capacity reached 1,840 gigawatts (GW) by year’s end, overtaking installed thermal power5 capacity by around 300 GW.6 Hydropower remained a major backbone of the electricity system (13.2%), while nuclear energy accounted for 4.6%.7
Grid expansion has been critical to this growth. Ultra-high-voltage (UHV) transmission lines connect resource-rich western regions to demand centres in the east, enabling large-scale integration of variable renewables such as wind and solar. China’s first UHV network expanded from an initial 640-kilometre project in 2009 to more than 62,000 kilometres across 46 completed projects by the end of 2025.8
Power system flexibility is anchored by pumped storage, the backbone of China’s energy storage systems, with capacity exceeding 66 GW in 2025 and on track to reach 120 GW by 2030.9 Alongside this, China is rapidly expanding new energy storage technologies10, primarily lithium-ion batteries, whose cumulative installed capacity reached 136 GW in 2025 after newly installed capacity increased 84%.11 Power demand response measures12 such as time-of-use tariffs and advances in storage technologies further support renewable energy integration.
This industrial expansion has generated significant economic benefits and employment while positioning China as a leading exporter of renewable energy and enabling technologies. Investments and production of goods and services in these industries reached a record contribution to GDP of RMB 13.1 trillion (USD 1.8 trillion) in 2025, accounting for around 9.3% of China’s GDP.13 The main drivers are batteries, electric vehicles and the solar industry.14 In 2024, China’s renewable energy industry supported an estimated 7.29 million jobs, or 43.9% of global renewable energy employment.15
In agriculture, electrification has been driven primarily by agrivoltaics, with more than 31 GW of installed capacity by 2022.16 Across the country, regions have locally adapted models such as livestock–solar integration, aquaculture–solar integration, and photovoltaic greenhouse projects.
In buildings, China is promoting heat pumps and renewable heat sources to phase out coal- and gas-based heating systems, while advancing building-integrated solar PV to meet low-carbon electricity demands. This has made buildings the fastest growing sector for electrification, reaching 55.3% in 2024.17
In the industrial sector, electrification and efficiency improvements are complemented by emerging deployment of electric boilers, industrial heat pumps and renewable-based hydrogen. By 2024, China’s industrial electrification rate reached 27.7%, with the four major energy-intensive industries18 accounting for around 18.4% of the total electrification rate.19
In transport, China’s sustained state support for both market uptake and domestic manufacturing capacity has led to the largest market for electric vehicles globally, with around 44 million units on the road by 2025.20 Electrified rail systems and urban transport further contribute to reducing fossil fuel dependence. Railway electrification in China expanded from 51,000 kilometres in 2012 to 123,500 kilometres by the end of 2024, covering 76% of the national railway network.21 In cities, “new energy” buses – which include battery, plug-in hybrid and fuel cell electric22 – accounted for 82.7% of the total urban public bus fleet by the end of 2024.23
Five-Year Plans provide overarching direction, giving rise to a diverse set of policies that embed renewable energy in manufacturing, infrastructure, and technological and workforce development. The 15th Five-Year Plan further integrates renewables into national energy security goals.24 Meanwhile, the “dual carbon” targets – peaking emissions before 2030 and achieving carbon neutrality before 2060 – anchor long-term ambition.25
Early renewable energy growth in China was driven by subsidies, tax incentives and feed-in tariffs. China’s renewable energy financial support peaked at USD 66 billion in 2022.26 As the sector matured, these incentives were replaced by market-based mechanisms such as the electricity spot market, the green electricity27 market and the national emissions trading system. Meanwhile, policy attention is moving towards system integration and energy storage, with the introduction of a capacity pricing mechanism in 2026 to support grid-side energy storage.28
China’s central-local policy co-ordination combines nationally defined targets and rules with local implementation and innovation. While the central government sets strategic direction, infrastructure planning, and renewable energy consumption obligations, provincial and local governments adapt policies to local resources, facilitating project deployment through streamlined permitting, land-use support and demonstration projects.
Policy implementation is further reinforced by large-scale, long-term investments in technological innovations, renewable energy projects and infrastructure by state-owned enterprises (SOEs). Many energy SOEs have established dedicated renewable energy subsidiaries, while fossil fuel SOEs are increasingly diversifying their portfolios through investments in renewable energy. For example, China Petroleum & Chemical Corporation (Sinopec) and China National Petroleum Corporation (CNPC) have both invested in renewable hydrogen production projects.29
These dynamics highlight that the energy transition in China is gradual and iterative, with socio-economic and environmental objectives equally critical to ongoing development.
Jiayi Wang, REN21
Jad Baba
Emily Océane Hommerich
Janne Luise Piper
Andrea Wainer
Jiayi Wang
Matteo Bianciotto – International Hydropower Association
Nhat Do – International Institute for Sustainable Development
Laura El-Katiri – International Network for Energy Transition Think Tanks
Nadeem Goussous – International Renewable Energy Agency
Diala Hawila – International Renewable Energy Agency
Lauren Hermanus – Southern Transitions
Dave Jones – Ember
Uni Lee – Ember
Gondia So Seck – International Renewable Energy Agency
Rohit Sen – ICLEI – Local Governments for Sustainability
Stephan Singer – Climate Action Network
Anuj Xess – Council on Energy, Environment and Water
Lisa Mastny (Editor)
89up (Design)
REN21 Secretariat, Paris, France
.svg)
.svg)
