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CHINA MONTHLY ENERGY UPDATE JULY 2025
Authored by Caroline Wang, China Policy Analyst, Climate Energy Finance with contributions from Tim Buckley, Director, Climate Energy Finance.
Previous CEF monthly updates here.
Got questions or feedback? Please reach out: caroline@climateenergyfinance.org
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SNAPSHOT
☀️ 212GW new solar capacity added in 1H 2025 – up 107% y-o-y
🌬️ 51GW new wind capacity added – up 99% y-o-y
⚡ 90% of new capacity additions from wind & solar
🔥 Thermal generation fell 1.9% y-o-y in 1H 2025; utilisation rate hit record low of 46%
🔋 21.9GW / 55.2GWh of new battery storage installed in 1H 2025 – +69.4% / +76.6% y-o-y
🚗 5.5 million NEVs sold – up 28% y-o-y; China maintains global EV leadership
🧠 +35.6% y-o-y investment in industrial robots – boosting productivity
🌍 1% of global CO₂ emissions avoided in 2024 via China’s clean tech exports
🏭 China leads in photovoltaics patenting – 80% of global solar PV innovations in 2022
🏗️ Zero-carbon industrial parks prioritised in 2025 policy with new national guidelines
🌐 US$9.7bn BRI green energy projects in 1H 2025 – record high
🇭🇺 🇧🇷 BYD expands Hungary electric bus factory; begins production at Brazil factory
🇮🇩 Trina Solar opens Indonesia’s largest solar plant – 1GW, US$94m investment
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SECTION 1: China power statistics – June 2025
In the first half of 2025, new wind and solar power capacity additions in China were 10 times more than thermal capacity and made up 90% of new adds. Renewables are playing a key role in decarbonising power generation.
While thermal power—predominantly coal—still accounted for over 60% of electricity output, its share continues to decline as clean energy capacity scales up, even as China’s economy continues to grow very strongly, lifting overall energy demand growth.
The deployment of advanced grid infrastructure and energy storage is helping to integrate the rising share of variable renewables, improving system flexibility and reliability.
China's strategy of "building new before phasing out the old" is visible in the numbers, with clean electricity additions continuing to outpace new coal capacity, indicating a structural shift in the power mix trajectory. Investment in power grid transmission projects continues to grow, with $US41bn invested in January-June, an increase of 15% year-on-year.
Even as China continues to build new thermal capacity, the average utilisation rate fell to a record low of 46% with thermal generation –1.9% y-o-y in 1HCY2025 and variable renewable energy (VRE) was +26.1% y-o-y.
Figure 1
Figure 2
The first half of 2025 saw total power generation rise 4.2% y-o-y on GDP growth of 5.3% y-o-y, highlighting strong domestic economic resilience despite the US’ trade war (see Figure 4).
The added value of industrial enterprises above designated size increased 6.4% year-on-year, according to the National Bureau of Statistics. In this context, it is pleasing to see thermal power generation (coal and methane) decline 1.9% y-o-y. VRE generation for rose 26.1% y-o-y.
In 1HCY2025, production declined in crude steel (-3%) and cement (-4.3%) in 1HCY2025, the two largest industrial emissions sectors in China behind the electricity sector.
This supports the recent analysis for Carbon Brief by the Centre for Research on Energy and Clean Air (CREA)’s Lauri Myllyvirta that China's CO2 emissions peaked in March 2024 peak and are declining thanks to clean power growth (see Figure 3 below).
Figure 3
Figure 4
Over half of the world’s battery energy storage installations are in China
In the first half of 2025, newly installed new energy storage capacity reached 21.9GW/55.2GWh, with a year-on-year increase of 69.4% (power) / 76.6% (capacity), with grid-side storage accounting for over 60% and concentrated in the Western provinces of Xinjiang, Inner Mongolia and Qinghai, according to new data from the China Energy Storage Network.
The newly installed capacity of lithium iron phosphate battery energy storage is 20.58GW/48.52GWh (including hybrid energy storage projects), accounting for 94% (power)/88% (capacity), which remains the mainstream technology.
Unlike the "June 30 installation rush" in previous years, the newly installed energy storage capacity in June this year was 4.1GW/10.3GWh, a year-on-year decrease of -31% (power)/-19% (capacity) (see Figure 5 below). This decrease came following a rush to install before the new market-based pricing policy took effect from 1 June 2025. The newly installed capacity of energy storage in May this year increased by more than 300% year-on-year.
New capacity grew at a high level in the first half of the year, is expected to exceed 43GW/110GWh in 2025. The rush to install PV and storage in 2025 will likely affect 2026 deployment. According to S&P Global Commodity Insights, China’s share of global annual installations is set to drop by 7% for PV and 15% for storage from 2025 to 2026. This will push Chinese manufacturers to expand more aggressively to overseas markets. CEF does not agree, and expects yet another record rate of installs in 2026, building energy independence, leveraging excess manufacturing capacity and continuing to drive innovation and cost advantages of low-priced RE.
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SECTION 2: CEF China work updates
CEF supports the Smart Energy Council’s leadership on accelerating Australia’s renewable energy future
On 9 July, Chief Executive of the Smart Energy Council, John Grimes, delivered a powerful call to action at the National Press Club, urging Australian Governments to urgently accelerate action to secure our energy transition and prosperity in a decarbonising global economy.
In the context of the global race to clean industrial growth, Mr Grimes pointed out:
In May 2025, China installed 119 GW of renewable energy. Australia installs 6 to 7 GW of renewable energy a year — both figures including rooftop solar. In May this year, China installed in two days what Australia installed in the whole of 2024.
China’s emissions peaked in March 2024, 6 years ahead of their climate target, and have been falling since.
Zero emissions capacity delivered over 40% of China’s electricity
The key national challenge now is: how do we pivot our economy to thrive in a rapidly decarbonising world? It’ll take the same political ambition, courage and reforming zeal of the Hawke and Keating Governments. Australia needs much more speed, scale and action.
There’s nothing more central to productivity than energy. Clean energy drives productivity – abundant, cheap, reliable power. Energy fuels everything in the economy. But to realise our renewable energy potential, we need urgent reform. If we don’t, Australia risks becoming the Kodak economy of the future. We need to speed up the rollout on our grid to smash connection delays and to fix outdated planning and environmental laws.
We’re in a diplomatic and economic race of our lives. A global race to real zero.
China plays as a team and Australia spends all our time trying to tear each other apart. That is no way to compete.
Watch the video of John Grimes’ speech here.
Caroline attended the Australia-China Clean Tech Innovation Roundtable
On 17 July, Caroline attended the inaugural Australia-China Clean Tech Innovation Roundtable, organised by Boson Ventures, thanks to Alan Cui and Betty Zhang. The roundtable brought together senior voices from industry, investment, government and research to spark real dialogue on the opportunities and challenges in cross-border clean tech collaboration.
Key takeaways include:
Australia must scale renewables faster and align manufacturing and innovation goals within a clear, industrial strategy (see recent op-ed by Emeritus Professor Roy Green)
Design in Australia, rather than a limited focus on production in Australia, can provide a more viable pathway to developing local manufacturing industries
Joint ventures with Chinese forms could unlock real tech deployment and scale innovation
Diplomatic momentum, like the 10-year anniversary of ChAFTA and the PM’s visit to China, provides the time-critical opportunity and connections to act.
Photos: Australia-China Cleantech Innovation Roundtable, 17 July 2025
PM Albanese’s visit to China signals improvement in bilateral relations
PM Albanese was in China on 12-17 July for the Australia-China Annual Leaders’ Meeting. Building on the stabilisation of the relationship over the last term of the Albanese Government, this visit sent a signal of the Government’s commitment to building a stable and constructive bilateral relationship in the context of rising global uncertainty and instability.
The structural challenge facing the Australian iron ore industry is why the PM attended a green steel roundtable with Chinese officials, six world leading Chinese steel manufacturers and Australia’s top iron ore mining companies BHP, Rio Tinto, Fortescue and Hancock to discuss the potential to build an Australian green iron industry, in partnership with China.
After the meeting, it was good to see our PM announce that a Policy Dialogue on Steel Decarbonisation had been established, which will “provide Australia with timely insights and input into the Chinese government’s planning on steel, including new opportunities for our domestic mining and steel industries.”
CEF published an analysis of the visit with a focus on green steel here, calling for decisive and timely follow through action. CEF’s media engagements include:
Tim Buckley on the green steel Shanghai roundtable on ABC NewsRadio, on Ausbiz and on Sky News TV with Kieran Gilbert.
CEF’s op-ed on the China green steel collaboration opportunity in PV Magazine.
Caroline Wang speaking ahead of the PM’s trip on the opportunities to partner with China, on ABC Online; on ABC AM: from 2:44 ; and quoted in CGTN .
Australia’s foreign investment review regime remains a sticking point
Building mutual trust and understanding will be crucial to ensure enduring stability in the bilateral relationship. From the Chinese side, perceived discrimination against Chinese companies by the Foreign Investment Review Board was raised, with the Chinese Foreign Ministry’s readout of the 8th Australia-China CEO Roundtable attended by Premier Li Qiang and PM Albanese, stating “it is hoped that the Australian side will treat Chinese enterprises in Australia fairly and properly solve the problems encountered by enterprises in market access, investment review and other aspects”.
Premier Li also stressed that “only when the government and enterprises move towards each other can development be better promoted”, reflecting their observation of Australia’s misaligned economic and security policies. This mirrors the observation made by Treasurer Jim Chalmers in a 2024 address to the Lowy Institute, when he called for a rethink of Australia’s foreign investment regime:
“Foreign investment is where the stovepipes of economic and national security have often failed to meet in the past. Or where even whole-of-government thinking has been stuck in a crude model of trade-offs and compromises.”
Given 70% of capital invested in Australia’s renewable energy projects comes from foreign investors, it is essential that Australia’s foreign investment rules are fit for purpose and provide clarity and confidence to investors. While CEF welcomes the Treasurer’s announcement of a single front door service, CEF understands some foreign investors are effectively ruled out due to geopolitical concerns, which reduces the pool of available capital and complicates the sale or refinancing of projects. CEF supports the Clean Energy Investor Group’s recommendation to the Productivity Commission that:
Greenfield renewable energy projects should either be exempt from FIRB or benefit from a dedicated, streamlined assessment track aligned with national clean energy priorities.
Additionally, FIRB could leverage the Future Made in Australia (FMIA) agenda to create an informal pathway for prioritising foreign investment proposals that align with national clean energy goals.
Finally, introducing clear and reliable timelines for the FIRB approval process, and clarifying the capital gains tax treatment for foreign investors in renewable energy assets, would help reduce uncertainty and cost.
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SECTION 3: China energy transition updates
China’s clean energy exports in 2024 alone will cut global CO2 by 1%
China’s exports of clean-energy technologies such as solar panels, batteries and electric vehicles are increasingly helping to cut emissions in other countries, according to a new Carbon Brief analysis by CREA’s Lauri Myllyvirta. Such exports in 2024 alone are already shaving 1% (some 220MtCO2) off global emissions outside of China and, in total, will avoid some 4bn tonnes of carbon dioxide (GtCO2) over the lifetimes of the products. Solar delivered the largest avoided emissions, followed by batteries and EVs (Figure 6 below).
Figure 6
In terms of resulting emission reductions, the largest destinations for China’s overseas clean-energy engagement are countries in the south Asia and the Middle East and north Africa (MENA) region which are members of the Belt and Road Initiative (see Figure 7 below).
Figure 7
China’s consumer goods trade-in programme an energy efficiency win
An Ember report released 15 July 2025 shows China’s consumer goods trade-in program could accelerate the annual efficiency improvement rate of its room air conditioner stock by up to 70%. This could potentially reduce residential cooling electricity use by up to 4.1% in 2025, demonstrating tangible energy savings in just one year. This reduction could save consumers up to US$943 million on electricity bills in 2025.
The trade-in programme encourages the replacement of older appliances and channels new purchases towards the most efficient models on the market.
From January to May 2025, Chinese consumers traded in 77.6 million home appliances across 12 appliance categories through this programme.
This is part of the Chinese Government’s economic policy shift to boost domestic consumption while improving energy efficiency. The Chinese Government has set a 2025 target of a yearly drop of around 3 percent in energy consumption per unit of GDP, and a drop of 13.5% from 2020 levels. Ongoing accelerated efforts in energy efficiency are key to China continuing to pull forward its plateau and subsequent permanent reduction in emissions.
European study: China leads as global hub for photovoltaics patenting
“China is just as much the science laboratory of the energy transition as its factory”, as a 2024 RMI report on the global clean tech race observed.
The European Patent Office’s latest technology insight report says there has been a substantial shift in photovoltaic patent filings towards China over the past 15 years, reflecting its rise as a leader in photovoltaic manufacturing and deployment. While international patents have declined since 2012, patent filings in China surged nearly six-fold since 2010. By 2022, China accounted for 80% of all new photovoltaic inventions worldwide.
According to solar expert Professor Ned Ekins-Daukes from the UNSW School of Photovoltaics and Renewable Energy Engineering, “inconsistent policy support contributed to the demise of the once-dominant European PV industry. There is now so little PV industry left in Europe, with China dominating innovation and manufacturing. China also had a period of policy uncertainty in 2018 (531 New Deal Crisis) but its manufacturers weathered this period of domestic turbulence by selling solar PV modules at low-cost globally.”
China’s “Zero-Carbon Parks”: A model for green industry
Accelerating the construction of zero-carbon industrial parks and factories features as a priority in the Chinese Government’s 2025 Government Work Report.
On 8 July, the National Development and Reform Commission, Ministry of Industry and Information Technology, and National Energy Administration released regulatory guidelines on the construction of zero-carbon parks, which are an important tool for achieving China’s dual carbon goals. These guidelines propose standardised and harmonised criteria for zero-carbon parks, to address the current challenge of fragmented "zero carbon/near zero carbon" standards across the large number of industrial parks in China, and the variation of their scale, industrial structure, and energy consumption characteristics.
The guidelines propose "carbon emissions per unit of energy consumption" (that is, the amount of CO2 emitted by various energy sources for every ton of standard coal consumed in the park) as the core criterion for zero-carbon parks, guiding them to strive for "near zero" carbon emissions while ensuring the development and energy consumption of enterprises.
In addition, the guidelines set five guiding indicators, including the proportion of clean energy consumption, unit energy consumption of park enterprise products, comprehensive utilization rate of industrial solid waste, comprehensive utilization rate of waste heat, waste cooling and waste pressure, and reuse rate of industrial water, and puts forward requirements regarding energy structure, circular economy, and resource conservation.
The industrial sector is the main source of China’s energy consumption and carbon dioxide emissions, accounting for about 68% of China’s carbon emissions.
China has been building large-scale industrial parks that run entirely on renewable energy, green hydrogen, and carbon capture, aiming for net-zero emissions. These parks:
Combine solar, wind, and storage to power factories 24/7.
Use green hydrogen to replace coal in steel/chemical production.
Recycle waste heat and materials in a circular economy.
Leverage China’s scale—some are bigger than Sydney!
As carbon emissions footprint requirements are gradually being integrated into international trade rules and supply chain systems, spearheaded by the EU’s CBAM, China’s zero-carbon parks, having traceable energy supply systems and comprehensive carbon footprint management systems, will also help Chinese companies significantly reduce their product carbon footprint and enhance "green competitiveness", according to a Q&A readout from officials of the National Development and Reform Commission. CEF advocates for China to build on this domestic emissions reduction program by expanding its national emissions trading scheme to build momentum towards a China CBAM to leverage the nation’s world leadership by building international linked frameworks in partnership with the EU.
China’s net-zero industrial parks are gaining global traction by offering an attractive solution to the challenge of decarbonising heavy industries. New energy systems leader Envision Energy has recently partnered with the Brazilian Government to develop Latin America’s first net-zero industrial park worth $US 1bn, focusing on Sustainable Aviation Fuel (SAF), green hydrogen, and ammonia. This builds on Envision’s rollout of the world’s largest green hydrogen and ammonia plant in Inner Mongolia Province and its plans to develop an integrated green hydrogen net zero industrial park in Spain in partnership with the Spanish Government.
Photo: Brazilian President Luiz Inácio Lula da Silva with Envision Chairman Zhang Lei. Source: ESG News
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SECTION 4: Chinese clean tech global footprint update
China’s BRI green energy engagement reached a new record
A new Griffith Asia Institute China Belt and Road Initiative Investment Report 2025 shows that 2025 H1 saw the highest BRI engagement in foreign investment ever for any 6-month period, with US$66.2 bn in construction contracts and about US$ 57.1bn in investments.
Green energy engagement reached new records with US$9.7bn in wind, solar, and waste-to-energy projects and an installed capacity of about 11.9 GW of green energy, while oil and gas engagement also reached record highs.
Technology and manufacturing investment also broke records, more than doubling to US$23.2bn from 2024 1H mainly focused on EV batteries and manufacturing, as well as significant engagement by Longi in green hydrogen in Nigeria. Other notable investments include US$2.1bn by China Aviation Lithium Battery (CALB) in a lithium battery factory in Portugal and US$700m into solar PV glass production in Egypt by Xinyi Glass Holding.
EV sector-related investments drive uptick in Chinese FDI in Europe
A report by Berlin-based Mercator Institute for China Studies (MERICS) and the Rhodium Group found that in 2024, EU and UK saw a rebound in Chinese foreign direct investment (FDI), driven by greenfield investments in EV supply chain, reaching €10 billion, up 47% from the previous year. Seven of the top 10 Chinese FDI transactions in Europe were related to EVs.
Hungary was the top destination for Chinese FDI in Europe for the second consecutive year in 2024, accounting for 31% of China's total investment in the EU and the UK, far exceeding Germany, France and the UK (20% in total). China's investment in Hungary is mainly concentrated in the automotive sector, especially EV manufacturing, accounting for 62% of China's EV-related investment in Europe, according to the report (see figures 8 & 9 below).
Figure 8
Figure 9
Source: Chinese investment rebounds despite growing frictions - Chinese FDI in Europe: 2024 Update, Rhodium and MERICS
Hungary’s mix of its pro-investment incentives, location, cheaper labour costs, existing auto manufacturing supply chain ecosystem, and industrial policy alignment makes it a top choice for Chinese auto FDI in Europe.
Hungary currently has four of China's top ten ongoing projects in Europe, including BYD's €4 bn Szeged passenger car factory and European headquarters, R&D centre and CATL's €1.6 bn Debrecen battery production base.
As the European Commission tightens screening over foreign investments, Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó has recently affirmed Hungary intends to remain the number European destination for Chinese investments. He explained that "according to our assessment, these Chinese investments have brought Hungary the most advanced technology and reliable jobs in large numbers. Without all these investments, the Hungarian economy and Hungary would have been poorer."
"Hungary is proof that Europe can only respond effectively to the great technological revolution taking place in the world if it cooperates closely with China. Hungary is proof that Europe can only come out of the great global automotive transformation if it does not limit the cooperation of European companies with Chinese companies," Minister Szijjártó said.
"We reject in the strongest possible terms the world being divided into blocs again. We stand most firmly in favour of the fact that the world needs much more connections, connectivity and global cooperation based on mutual respect," he continued.
Changan opens its Thailand R&D Centre
Changan Automobile, one of the top 4 auto companies in China, opened its R&D centre in Thailand last month following the opening of its first overseas EV factory in the country, according to the Thai Government.
BYD’s first EV rolls off production line in Brazil
On 2 July, the BYD factory in Bahia, Brazil began production, according to Brazilian media.
The Camacari plant, with an investment of US$1bn, is considered one of the largest industrial facilities in Latin America for EVs, occupying an area of 4.6 million m² (equivalent to 645 soccer fields).
Currently, the production capacity is 150,000 vehicles/year, with an expected expansion to 300,000 in the next phase.
The Camaçari plant is expected to become a hub for exports in Latin America. Its strategic location in the Northeast of Brazil favours the shipment of vehicles to countries such as Argentina, Uruguay and Colombia via optimized sea routes.
BYD launches electric bus and truck factory in Hungary
BYD is expanding its electric bus manufacturing plant in Komárom, Hungary, to also manufacture electric trucks and will build an R&D centre. The investment is worth US$94.8 million (including US$9.2 million from the Hungarian Government) and will create 620 new jobs, according to the Hungarian Trade Promotion Agency.
Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó with BYD Hungary, 27 June . Source: Hungarian Trade Promotion Agency
Trina Solar Indonesia opens country’s largest solar factory
June was a big week for solar in Indonesia.
On 19 June, the Indonesian Minister of Industry, Agus Gumiwang Kartasasmita inaugurated the country's largest solar cell and module factory, PT Trina Mas Agra Indonesia, with a 1GW annual production capacity and an investment of over Rp1.5 trillion (US$93.75 million), reported Indonesia Business Post.
Operated by Trina Solar Indonesia (TMAI) and located in an industrial zone, the factory is a joint venture between China's Trina Solar, Cotai Group's Dian Swastatika Sentosa, state-owned utilities PLN Indonesia Power Renewable and Agra Surya Energy.
The factory will employ around 640 skilled workers (of which about 60% are local residents of Kendal) and offer technical training to uplift competencies in solar cell and module production.
On 24 June, another major solar manufacturing project – Longi and Pertamina New & Renewable Energy, a unit of Indonesia’s state-owned utility Pertamina, announced they were planning a 1.4 GW solar cell and module factory in Indonesia.
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