Achieving the goals of carbon neutrality and peak carbon emissions by 2060 in China is progressing, with the proportion of non-fossil energy use expected to reach about 20% in 2025, 25% by 2030, before soaring to more than 80% by 2060.
The proportion of non-fossil energy in China’s primary energy consumption from 2019 to 2060 (data source: National Energy Administration, State Council):
This means there are real opportunities both now and in the future for companies, in particular across offshore wind, carbon capture usage and storage (CCUS), and hydrogen.
Offshore Wind
The offshore wind pipeline in China over the next decade (2024-2034) is projected to be 159GW. This is estimated to be over 11,000 turbines.
According to the Energy Research Institute of the National Development and Reform Commission, wind energy accounted for 3.2% of China’s energy structure in 2020. It is projected to rise to 38.5% by 2050.
Through the “14th Five-Year Plan” period, running between 2021 and 2025, the annual newly installed wind energy capacity should be no less than 60GW, before climbing to no less than 70GW per year between 2025 and 2030.
According to statistics from the Chinese wind energy industry, China added a collective 77.1GW of wind energy capacity in 2023 – 69.4GW onshore and 7.6GW offshore.
China’s newly added wind power installed capacity and forecast from 2001 to 2035 (Data source: National Development and Reform Commission, National Energy Administration, China Wind Energy Association (CWEA)):
CCUS
In China, large-state owned power generation groups are still reliant on primarily coal-fired power generation.
Given the actual energy structure in China, coal-fired power remains an important support for peak power generation under extreme conditions. It plays a foundational and fallback role, ensuring energy security. Looking into the future, coal-fired power will continue to co-exist and develop alongside clean energy.
To achieve the carbon neutrality goal by 2060, China needs to achieve a cumulative emissions reduction task of approximately 17.5-31.5bn tons through CCUS technology.
The demand for CCUS emissions reduction by 2030 is estimated to be between 20mn and 408mn tons, with a market size that exceeds hundreds of billions of RMB.
CCUS Projects in China (2021):
Hydrogen
Since the “dual carbon” goal was proposed in 2020, China’s hydrogen industry has been gaining momentum.
In 2021, China’s annual hydrogen production reached approximately 33mn tons – a year-on-year increase of 32%. This made it the largest hydrogen producer in the world.
The China Hydrogen Energy Alliance is predicting that by the time of carbon peaking around 2030, China’s annual hydrogen demand will surpass 40mn tons, accounting for around 5% of terminal energy consumption. Renewable hydrogen supply will reach 7.7mn tons.
Come 2060, assuming carbon neutrality is achieved, the annual demand for hydrogen is expected to be around 130mn tons, accounting for around 20% of terminal energy consumption. Around 70% of this is expected to be produced from renewable energy sources.
An overview of energy projects in China, including hydrogen facilities:
The opportunity: How Opergy can help
It is clear from the numbers above that the energy market in China presents significant opportunities.
While there are legislative and cultural differences that companies need to be aware of, with the right support, there are huge opportunities to grow into this exciting and rewarding market
Opergy Scotland has colleagues in both the UK and China. Anson Jin, based in Ningbo in China, works with companies that are either taking their first step to explore this market or progressing further than they would have otherwise been able to without in-country representation.
Opergy also assists with looking for a company’s own supply chain, or partners to collaborate with.
