China aims for 60% non-fossil fuel power capacity in 2025

China has released the annual targets for its energy sectors, requiring non-fossil fuel sources to account for 60% of its total power capacity, an increase from 55% in the previous year, according to the 2025 Energy Work Guidance released by the National Energy Administration on Feb. 27.

The NEA is China's principal energy market regulator, and its annual targets play an essential role in guiding energy companies in making investment and operational decisions.

Notably, the NEA also needs to push for critical targets under China's overarching 14th Five-Year Development Plan (2021-2025) to be met on time, so the newly released targets for 2025 are especially critical as the deadline for meeting the 14th FYP targets is approaching.

The two most critical energy targets under the 14th FYP are for non-fossil fuel sources to account for 39% of total electricity production and 20% of total energy consumption.

To ensure these overarching production and consumption targets can be met on time, the NEA set this year's capacity target at having non-fossil fuels account for 60% of total generation capacity.

Non-fossil fuels include renewable sources such as solar, wind and hydropower, along with nuclear energy.

Notably, these annual targets were released right before China's biggest annual political meetings, called "Two Sessions," which will start on March 4 in Beijing and set a comprehensive work plan for all government bodies and businesses for the upcoming year.

China's total installed power generation capacity is expected to exceed 3,600 GW in 2025, up from about 3,170 GW in 2024, with newly added renewable power generation capacity projected to surpass 200 GW this year, the NEA said in the 2025 guidance.

S&P Global Commodity Insights forecast that China's actual renewable power generation capacity addition is likely to reach about 300 GW this year.

The NEA also called for key sectors, such as industry, transportation and construction, to expedite the energy transition and accelerate renewable energy adoption.

Additionally, it asked provincial governments and grid companies to continue expanding the cross-provincial power transmission channels to address the supply-demand imbalance in individual provinces, especially for renewable electricity.

Energy security

Despite the energy transition, the NEA reiterated that energy security remains a top priority, emphasizing the important role of fossil fuels in stabilizing the country's energy system.

In 2024, China achieved record coal production and maintained crude oil output above 200 million mt for the third consecutive year, while natural gas output increased by over 10 Bcm, marking an eight-year growth streak.

For 2025, the NEA anticipates continued growth in overall energy production, with coal output remaining steady or increasing, crude oil production sustaining above 200 million mt, and a continued rapid rise in gas output.

Additionally, the country's oil and gas reserves are expected to continue expanding this year in order to cut dependency on imports.

China's total power generation volume is projected to reach approximately 10,600 TWh in 2025, up from about 9,960 TWh in 2024, according to the NEA.