CHINA MONTHLY ENERGY UPDATE SEPTEMBER 2025

Authored by Caroline Wang, China Lead, Climate Energy Finance 

Previous CEF monthly updates here. 

Got questions or feedback? Please reach out: caroline@climateenergyfinance.org     

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SNAPSHOT – CHINA ENERGY, ECONOMICS, INDUSTRY UPDATE, AUGUST 2025

⚡ Historic Nationally Determined Contribution (NDC) Upgrade: At the UN, President Xi announced China’s first absolute emissions-reduction target under the Paris Agreement —cutting economy-wide greenhouse gases 7-10% below peak by 2035—while pledging >30% non-fossil energy consumption and 3,600 GW wind + solar capacity. 

☀️ Clean-energy build accelerates: 231 GW solar and 58 GW wind added Jan–Aug 2025; zero-emissions power up 13.2% yoy, now 41% of generation. 

🔋New energy storage target: new National Development Reform Commission (NDRC)/ National Energy Administration (NEA) plan targets ≥180 GW by 2027; 2024 alone saw record 37GW / 91GWh commissioned. 

🌐 Green diplomacy: Shanghai Cooperation Organisation (SCO) summit launched a China-SCO Green Industry Cooperation Platform, extending China’s climate statecraft and supply-chain partnerships across Eurasia. 

🏭 Industrial strength: Manufacturing power demand +5.5% yoy in August, led by electronics, EVs, and batteries (new energy vehicle (NEV) output +22.7 %, Li-ion batteries +44.2%). 

🇨🇳 NEX 2025 Forum milestones: Clean energy now 28.6 % of consumption; wind + solar capacity 1,410 GW (six years ahead of UN pledge); 86 % of new installs are zero-emissions. Experts project >3,000 GW wind + solar by 2030 with non-fossil generation exceeding 50 %. 

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SECTION 1: CHINA POWER STATISTICS – AUGUST 2025

Renewables Dominate New Capacity While Coal Holds Steady 

China’s January–August 2025 power sector data show the country continuing to build clean energy at a world-leading pace, with 231 GW of solar and 58 GW of wind added in eight months, although about half of this was added in May alone in the rush to install before the market pricing mechanism applied to renewables took effect in June.  

In the first eight months of 2025, zero-emissions sources generated 41% of China’s electricity, up by 13.2% yoy (see Figure 3 below), while coal generated 56%, down 0.5% yoy. Hydropower recorded a 4.6% drop, and 9.1% in the month of August alone.  

In January to August 2025, newly added renewable energy generation capacity made up 86% of total added power generation capacity, driven by solar (up 65% yoy), while fossil power comprised 14% (see Figure 1 below). Investment in grid upgrades and infrastructure totalled US$53bn in this period, up 14% yoy.  

Figure 1 

Figure 2

Looking ahead, the China Electricity Council in its "Analysis and Forecast Report on National Electricity Supply and Demand Situation in the First Half of 2025" predicts that newly commissioned power generation capacity will exceed 500GW by 2025, setting a record high. Of this, ~400GW (80%) will be new renewable energy power generation capacity. 

Electricity Use Up 5% on Strong Manufacturing Growth 

Total electricity generation continued to grow on the back of strong industrial demand and recent policies incentivising increased domestic consumption. In August 2025, total electricity consumption in China reached 1.02 million GWh, a year-on-year increase of around 5%, in line with the China Electricity Council’s projection of 5%-6% in 2025 taking into account record high summer temperatures experienced across China.  

In August, national manufacturing electricity consumption increased by 5.5% yoy, the highest level so far this year, reflecting strong growth in industrial production, with the added value of large-scale industrial enterprises rising 5.2% yoy.  

Electronics, electrical machinery and automobiles remained the top three sub-sectors. Green-technology manufacturing was a standout: new energy vehicles, EV lithium-ion batteries and solar cells grew 22.7%, 44.2 % and 16.8% yoy, respectively, while wind-turbine and charging-station output surged 78.1 % and 14.9%. 

Figure 3 

President Xi announced China’s NDC in a UN address   

On 24 September, President Xi announced China’s new NDC: “By 2035, China's economy-wide net greenhouse gas emissions will be reduced by 7-10% from their peak, and we will strive to achieve even better”.  

This is the first time that China put forward an absolute emissions reduction target, which covers economy-wide emissions from all greenhouse gases.  

See CEF’s commentary on the target here. 

While the absolute figure seems modest, China has a record of under-promising and over-delivering on its targets, which UNFCCC Executive Secretary Simon Stiell also acknowledged, such as surpassing its wind and solar power generation capacity target 6 years ahead of schedule (see table below).  

President Xi also announced the following: 

• Non-fossil energy consumption will account for over 30% of total energy consumption.

• The total installed capacity of wind and solar power generation will more than six times the 2020 level, aiming to reach 3,600 GW (about as much as exists in the entire world right now) 

• Forest stock will exceed 24 billion cubic metres.  

• New energy vehicles will become the mainstream of new vehicle sales. 

• A national carbon emissions trading market will cover major high-emission industries 

• A climate-resilient society will be essentially established. 

In response, some Western commentators have pointed to the announcement’s lack of ambition and specificity, even as President Trump called climate change a "con job" at the UN a day earlier. To this,  Dr Muyi Yang, Senior Energy Analyst at Ember and principal author of the recently launched flagship China Energy Transition Review 2025 report, said: 

“People tend to read NDCs only through the lens of ambition. That matters, but what matters most now is execution. Across many countries we’re seeing a quiet drift toward transition delay. Not denying the transition, just urging caution and using energy security, technical hurdles, or economic uncertainty to tap the brakes. In this environment, we need strong, sustained commitment so these challenges are treated as problems to solve, not excuses to stall. 

China’s updated NDC signals exactly that commitment. It points to a shift from merely adding clean megawatts on top of the legacy fossil system to a genuine system transition. A 7–9% cut below the peak by 2035 implies only a brief post-peak plateau before structural fossil decline. Delivering it will require confronting coal politics, solving integration challenges, and staying focused amid economic restructuring and geopolitical headwinds. That's why a strong, sustained commitment is critical.” 

The announced expansion of the ETS to emissions-intensive industries was also notable. Huw Slater, Climate & Energy Specialist from ClientEarth said: 

“In addition, China’s national emissions trading system will expand to cover key emitting industrial sectors. Recent related announcements of an absolute cap for selected industries from 2027, and an increased focus on information disclosure and public oversight, represent progress towards realisation of the ‘polluter pays’ principle, and aligns with an overall shift in China’s economic strategy to a low-carbon model.” 

CEF expects to see more comprehensive sectoral targets and implementation directions provided in China’s 15th Five-Year Plan soon to be released. 

Please refer to Carbon Brief’s Q&A: What does China’s new Paris Agreement pledge mean for climate action? including perspectives from leading global experts.  

According to Tsinghua University’s Global Carbon Neutrality Annual Progress Report, as at 25 September 2025, 189 countries had submitted their 2030 NDCs, covering 87% of global net greenhouse gas emissions. 48 countries had submitted their 2035 NDCs, covering 56% of global net greenhouse gas emissions, a far lower level than the previous round of NDCs.  

Preliminary estimates suggest that if countries fully implement their NDCs, emissions could be reduced by -1% to 7% in 2030 and by 4% to 13% in 2035 (compared to 2019 levels). However, this level of reduction falls far short of the emission reduction scenario proposed by the IPCC, consistent with the goals of the Paris Agreement. 

China releases 2027 large-scale new energy storage target of 180 GW 

 The NDRC and the NEA issued the "Special Action Plan for Large-Scale Construction of New Energy Storage (2025-2027)", proposing that by 2027, China’s new energy storage installed capacity will reach more than 180 GW, driving direct investment in projects of approximately RMB250b (US$35.1b). 

The Action Plan states that by 2027: 

• new energy storage will have achieved large-scale and market-oriented development; 

• China’s technological innovation and equipment manufacturing capabilities will remain at the forefront globally;  

• market mechanisms, business models, and standards systems will be largely mature and sound 

China New Energy Storage Alliance predicts that by 2030, China's cumulative installed capacity of new energy storage will reach 236.1 GW under a conservative scenario and exceed 291 GW under an ideal scenario, with a compound annual growth rate exceeding 20% ​​over the next five years. 

In 2024 alone, China commissioned a record 37 GW/91 GWh of battery storage – more than the combined additions of the United States (12 GW/37 GWh) and Europe (12 G W/21 GWh). 

In July 2025, the Hongliu Energy Storage Power Station Demonstration project in Qinghai Province, was connected to the grid, according to Energy Storage China Network. At 225MW/900MWh, the project is currently the largest grid-side electrochemical energy storage power station project in China (see image below). 

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SECTION 2: CHINA ENERGY DIPLOMACY

China’s green energy diplomacy supercharges at the Shanghai Cooperation Organisation Summit in Tianjin 

September saw China host the Shanghai Cooperation Organisation Plus Conference in Tianjin, which brought together heads of state from 23 countries which collectively represent about half of the world’s population and 40% of global GDP.  

The Tianjin summit proved China’s tremendous convening power in a moment of historic change in the global political and economic landscape, notably with the attendance of Indian President Narendra Modi and of Southeast Asian heads of state from Indonesia, Malaysia, Cambodia, Vietnam, Laos and Myanmar. Further, SCO Member States agreed to grant Laos dialogue partner status within the SCO, making it the third Southeast Asian nation to become a dialogue partner.  

President Xi put forward in a speech at the summit China’s Global Governance Initiative (GGI), building on its Global Development Initiative, Global Security Initiative, and Global Civilization Initiative, which together are guided by the concept of “building a community with a shared future for mankind”. The GGI’s core concepts are articulated as “upholding sovereign equality, upholding the international rule of law, upholding multilateralism, adhering to a people-centred approach, and focusing on practical results”. 

As part of a new suite of regional cooperation initiatives, President Xi announced that China will establish three China-SCO cooperation platforms for energy, green industries, and the digital economy, as well as three cooperation centres for scientific and technological innovation, higher education, and vocational and technical education.  

The establishment of the China-SCO Green Industry Cooperation Platform signals the expansion of SCO regional cooperation from traditional security and economic sectors to green and sustainable development. The Platform has been described as “an important measure to adapt to the global trend of green transformation” and aims to strengthen exchanges and cooperation among SCO countries in the field of green development.  

NDRC Deputy Secretary-General Xiao Weiming explained that the China-SCO Green Industry Cooperation Platform will “promote policy exchanges, project collaboration, and resource sharing in the green industry among SCO countries…”. 

In a Statement on Cooperation in Green Industries, Member States agreed to cooperate on: 

• improving ecological, resource and energy efficiency 

• establishing a carbon market mechanism  

• reducing greenhouse gas emissions  

• environmental protection  

• rational and intensive use of resources  

• green, low-carbon and just transformation of energy and industry, and  

• green upgrading of infrastructure and industrial parks.  

These initiatives demonstrate China’s proactive green developmental statecraft with its neighbours, leveraging its industrial expertise and capabilities in green energy and industrial sectors.   

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SECTION 3: CHINA CLEAN ENERGY INDUSTRY UPDATES

China’s New Energy Forum 2025: Key Milestones and Future Roadmap 

As part of an Australian delegation, Caroline attended the China New Energy International Forum in Beijing on 16-18 September, hosted by the China New Energy Chamber of Commerce, China’s peak renewable energy industry body. The annual Forum brings together China’s new energy industry to discuss current trends, challenges, and policies. China’s top industry and technology experts shared their analyses and insights on these.  

The conference comes during a critical period of China’s fast-track journey of comprehensively implementing its dual-carbon strategy and accelerating the transformation of its energy structure, as the country prepares to release its 15th Five Year Plan.  

In an opening address, Mr. Du Xiangwan, Deputy Director of the NEA Expert Advisory Committee, congratulated the new energy industry for the important contribution it has made over the 14th Five Year Plan towards China’s low-carbon transition, highlighting the following achievements: 

• By 2024, China's share of clean energy consumption reached 28.6%, an increase of 11.7 percentage points compared with 10 years ago, while the proportion of coal consumption has decreased by 12.6% cumulatively 

• By the end of 2024, China's wind power and solar power generation capacity combined reached 1,410 GW, six years ahead of schedule to meet its target submitted to the UN 

• New energy has become the absolute primary force of China's power installation capacity, with a high proportion of 86%.  

• In terms of industrial competitiveness, China has already built the world's most complete wind power and solar PV industry supply chain. 

Mr Du however also recognised that with the rapid development of solar and wind energy, the intermittency of these power sources was posing challenges to the grid. He noted solutions being deployed to address these, including the integration of renewable energy with energy storage, the use of advanced grid dispatch technology, leveraging AI to better integrate new energy into the existing energy system.  

Notable assessments on the expected 2030 state of play of China’s new energy revolution were made by Professor Ouyang Minggao from Tsinghua University, who stated in his presentation that: 

• From 2024 to 2030, the average annual increase in wind and photovoltaic installed capacity will be approximately 270 GW; the total installed capacity of wind and photovoltaic power generation will exceed 3,000 GW.  

• 2030: Low-Carbon Explosion:  

• Non-fossil energy power generation exceeds 50%.  

• Large-scale production of all-solid-state batteries and vehicle-grid deployment begins to become widespread (note national vehicle-to-grid city-level demonstration projects began in 2025). 

• 2035: Green electricity is expected to become the primary source of charging power, and vehicle-to-grid in the short-term energy storage field will exceed fixed battery energy storage. The number of electric vehicles is expected to reach 200-300 million units. 

Photo: Professor Ouyang Minggao, Tsinghua University 

Looking to China’s 15th Five Year Plan 2026-2030, which is expected to be released following the Chinese Communist Party Central Committee plenum in the fall of 2025, Ms Shi Jingli from the NDRC Energy Research Institute shared the following directions emphasising further development of: 

• large-scale wind and photovoltaic new energy bases in deserts and integrated hydro, wind, and solar power bases in major river basins. 

• Offshore wind power  

• distributed solar  

• integrated development of new energy and industry.  

Photo: Ms Shi Jingli, NDRC Energy Research Institute  

Industry insiders analysed that the current campaign led by the government, which aims to resolve “involutionary competition” (内卷), a vicious cycle where companies engage in increasingly intense competition that yields diminishing returns for all participants. 

The campaign has begun to show results, but in order for the PV industry to truly return to a sustainable development cycle, continued concerted efforts are still needed. Many expressed the view that the key to overcoming involution in the development of new energy lies in synergizing supply and demand, and enhancing technological and application-specific innovation.  

Australian delegation raises ambition for a new chapter of Australia–China Innovation collaboration 

John Grimes, CEO of Smart Energy Council, gave a presentation during the Solar Innovation and Application session. His address bridged the past and future of solar innovation. He highlighted the historic partnership between Australia and China that saw foundational Australian research – the Passivated Emitter and Rear Cell (PERC) technology  – commercialised at global scale in China, and outlined the path of collaboration forward. Mr Grimes urged collaborative strategies—skills training, green finance, circular economy practices, and resilient supply chains—to open new channels for growth and co-author the next phase of the global clean-energy transformation.  

Professor Nicholas Ekins-Daukes, Head of UNSW School of Photovoltaics and Renewable Energy Engineering, in his address highlighted UNSW’s long-standing partnership with China and its world-leading role in solar PV innovation—from the PERC cell breakthrough led by Professor Martin Green to next-generation technologies like OMEGA silicon, which uses organic molecular coatings to improve solar capture and PV efficiency, super-efficient multi-junction quantum-well cells and even night-time solar power—showing how fundamental research, industrial prototyping and initiatives like the UNSW TORCH Precinct and the ACAP Industry Consortium are translating science into scalable manufacturing. 

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