China stands at a pivotal point in its climate transition journey. While the road to carbon neutrality remains long and demanding, the country’s rapid and remarkable progress in renewable energy deployment has already started to transform its emissions profile. The key challenge now is to sustain this momentum through deeper decarbonization, especially by tackling key infrastructure and policy constraints.

Between 2020 and 2024, China experienced strong growth in both energy consumption and carbon emissions, even as overall economic growth slowed. Energy consumption rose by 4.7 percent annually on average, while emissions grew by 3.9 percent, both growing faster than in the preceding five years. These trends have put pressure on meeting China’s interim climate targets under the 14th Five-Year Plan, as energy and carbon intensity reductions are both lagging behind schedule.

At the core of this dynamic is surging electricity demand. As sectors such as transportation and manufacturing accelerate electrification, electricity consumption has risen by nearly 7 percent annually in recent years. The power and transport sectors now account for most of the country’s emissions growth, while industrial emissions—particularly from steel and cement—have stabilized due to the ongoing property market adjustment.

Yet, amid this challenge lies a powerful opportunity. China is rapidly emerging as the world’s leading force in renewable energy development. In 2023 and 2024, China added a combined 649 gigawatts of new solar and wind capacity, representing around 60 percent of total global additions. Since 2020, its installed solar and wind capacity has tripled. The electricity generated by renewables reached 1,830 terawatt-hours in 2024, roughly equivalent to the total electricity consumption of China’s entire tertiary sector.

However, the growth in clean power generation has not fully kept pace with the rapid expansion in installed capacity, and fossil fuels—especially coal—remain a critical backstop for meeting China’s soaring electricity demand. Between 2021 and 2024, approximately 45 percent of incremental power consumption was met by coal or other fossil fuel-based generation.

This presents a paradox: despite record growth in installed renewables capacity, reliance on fossil generation remains substantial.

The main constraint is inadequate transmission infrastructure. Many renewable resources are concentrated in remote inland provinces, far from coastal areas which have high power demand, creating geographical imbalances in supply and demand. In contrast to the rapid expansion of renewable generation, investment in power transmission has also been lagging, with total power sector investment falling from 66 percent in 2018 to just 35 percent in 2023.

As a result, grid limitations are increasingly hindering renewable electricity from reaching end users. Curtailment rates for wind and solar, i.e. the proportion of generated electricity that was wasted or not dispatched due to grid limitations or oversupply, have risen in the past two years, signaling that transmission capacity is struggling to keep pace with generation. Without a stronger grid backbone, much of China’s clean energy potential remains underutilized.

Addressing this challenge will require stepped-up investment in ultrahigh-voltage transmission lines, smart grid technologies, and energy storage solutions to enhance flexibility and manage intermittency.

Integrating renewables into grid operations is a necessary first step, but doing that alone would not be sufficient. The recent Spain–Portugal blackout highlights the operational risks associated with rising renewable penetration. To enhance overall grid resilience and ensure system stability, China must also invest in advanced voltage control, synthetic inertia, distributed energy storage, and stronger inter-regional transmission links, gradually reducing its reliance on fossil backup.

In parallel, deeper reforms in China’s power sector can help ensure clean energy generated is delivered efficiently and fairly. Building a truly integrated national electricity market—through the development of real-time and spot trading platforms, greater regional interconnection, and more flexible electricity pricing—will be essential to maximize the value of clean power. Reforming dispatch protocols to prioritize low-carbon generation and fostering competition across provincial boundaries can further accelerate the green transition.

The good news is that the turning point may be near. In the first quarter of 2025, the increase in China’s renewable electricity generation outpaced the growth in overall power demand. If this trend continues, China’s power sector emissions could peak this year—a major milestone on the path to reach its 2030 and 2060 climate goals.

Today, China’s clean energy transformation is already reshaping the global energy system. Its next phase—which is set to emphasize on integration, efficiency, and reform—will determine how quickly and effectively the transformation leads to sustaining emissions reductions.

If China can align its infrastructure and institutions with the pace of its renewable expansion, the country will not only meet its climate targets, but also set a new global benchmark for how to scale decarbonization in a fast-growing, energy-hungry economy.