CEI’s report provides a comprehensive analysis of China’s current energy dynamics, supply sources, and near-term evolution, synthesizing the latest 2025 data from authoritative sources.

1. Executive Summary

China’s energy system is undergoing a dual transformation: rapid renewable expansion at grid scale alongside persistent fossil fuel reliance for security. Key 2025 milestones include:

  • Renewable dominance: Solar/wind capacity exceeds 16.7 billion kW (45.8% of total), overtaking coal 5.
  • Structural shifts: Clean energy consumption reaches 29.8%, while coal dependency drops to 56.2% 1.
  • Emerging challenges: Grid flexibility gaps threaten renewable utilization rates, with Northwest regions already falling below 90% 5.
2. Current Energy Production

Key Statistics (2025 H1)

  • Total production: 25.8 billion tons of standard coal (TCE), up 3.2% YoY 1.
  • Fossil fuels:
    • Coal: 24.5 billion tons (+1.5%)
    • Oil: 1.1 billion tons (+2.1%)
    • Gas: 132 billion m³ (+6.5%) 1.
  • Renewables:
  • Solar/wind generation: 1.14 trillion kWh (23.7% of electricity) 5.
  • Hydrogen: Annual output projected at 37 million tons (56.7% from coal) 2.

Table: 2025 H1 Energy Production Breakdown

Note: Solar/wind share is of electricity generation only

3. Energy Consumption Patterns

Sectoral Demand (2025 H1)

  • Total consumption: 28.5B TCE (+4.3% YoY) 1.
  • Electricity surge:
    • Power use: 4.9T kWh (+6.5%), 29% of end-use energy 1.
    • AI/digital demand: 5G base stations (1,400GWh), data centers (3,600GWh projected for 2025) 69.
  • Gas slowdown:
    • Apparent consumption: +2.6% (vs. 7.3% in 2024), dragged by industrial slump 7.

Figure: 2025 H1 Final Energy Consumption by Sector

4. Energy Mix & Supply Sources

4.1 Power Generation Mix

  • Fossil dominance persists: Coal/gas provide 58.2% of electricity (down 2.1pp YoY) 1.
  • Renewables rise: Non-fossil sources hit 38.6% share (+5.2pp), led by solar (8.4%) and wind (10.1%) 1.
  • Utilization challenge: Solar/wind average hours fall 50–100 hours due to grid constraints 5.

Table: 2025 H1 Electricity Generation Structure

 

4.2 Primary Energy Supply
  • Domestic production: Covers 80% of needs, led by coal (62.1%) 1.
  • Imports:
    • Oil: 270M tons (-3.5%), diversification away from Middle East.
    • Gas: 135B m³ (+8.2% via pipelines; LNG imports -8.5% due to US tariffs) 17.
    • Coal: 280M tons (+10.3%) despite record domestic output 10.
5. Near-Term Outlook (2025–2030)

5.1 Capacity Expansion

  • Renewables acceleration:
    • Solar to hit 900GW by 2025 (from 680GW in 2024) 3.
    • Annual additions: 150–200GW solar, 70–100GW wind through 2030 58.
  • Grid modernization:
    • New ultra-high voltage lines: Gan-Zhe, Meng-Dian, Zang-Yue to enable cross-regional transmission 5.
    • Storage surge: 949GWh installed by mid-2025 (+29% YoY); 3.13TWh targeted by 2030 8.
5.2 Structural Shifts
  • Coal decline: Share to fall below 50% by 2030 (from 56.2% in 2025) 18.
  • Green hydrogen scaling: Electrolyzer costs to drop 40% by 2030; seawater-based projects to unlock offshore wind synergy 2.
  • Market-driven transition:
    • Policy No. 136 abolishes “guaranteed procurement” for renewables, forcing competition 58.
    • Green power trading to grow 30% annually, linked to carbon markets 1.
5.3 Critical Challenges
  • Seasonal balancing: Summer 2025 coal/gas generation spiked 4.3% during record heatwaves 10.
  • Northwest curtailment: Solar utilization in Xinjiang/Qinghai at 84–88% (below 90% policy red line) 5.
  • Gas-fired uncertainty: Utilization may drop post-summer; price reform needed for peak-shaving role 7.
6. Energy Import Supply Chain Dynamics

China’s energy security hinges on complex global supply chains for oil, gas, and coal imports. This section analyzes key trade routes, supplier countries, and emerging vulnerabilities.

6.1 Oil Import Network (2025)

Key Insights:

  • Middle East dominance: 66.7% of imports (180M tons) via Strait of Malacca
  • Russian pivot: Pipeline and Pacific shipments now 35.2% of non-Middle East supply
  • Venezuela resurgence: Imports rebounded to 12M tons after US sanctions relief

6.2 LNG Import Infrastructure

Critical Infrastructure:

  • CNOOC leads with 68Bcm existing capacity
  • Private sector growth: 10Bcm new capacity planned
  • Qatar contracts: 27% of capacity dedicated to 27-year supply deals

6.3 Coal Import Corridors

Supply Chain Risks:

  • Indonesian reliance: 52% of thermal coal imports
  • Australian diversification: Volumes recovering after 2022 embargo
  • Rail bottlenecks: Mongolian imports constrained by 30M ton/year capacity limit

6.4 Strategic Petroleum Reserve Levels

Security Status:

  • 78 days coverage: Below 90-day IEA recommendation
  • New tanks: 50M barrel capacity under construction in Xinjiang
  • Private reserves: Commercial stocks add ~30 days of coverage
7. Conclusions & Implications
  • Path to peak carbon: Non-fossil capacity will hit 60% by 2025, but coal remains essential for baseload 68.
  • Security vs. transition: LNG import diversification and coal output growth continue despite renewables push 710.
  • Global impact: China’s solar module exports (40% of 600–700GW annual production) will accelerate global decarbonization 3.