China’s new five-year plan targets carbon peaking by 2030 and neutrality by 2060 but faces coal and grid challenges.
Key Points
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China’s Five-Year Plan (2026-2030):
- Aims for carbon peaking by 2030 and neutrality by 2060.
- Coal remains dominant in energy consumption.
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Challenges in Green Transition:
- Inefficient renewable energy distribution, with much power wasted.
- Costly grid upgrades needed to handle renewable energy surpluses.
- Investment and Economic Constraints:
- State Grid Corporation plans to spend 650 billion yuan in 2025 for power network upgrades.
- Challenges persist due to the 2021 property crisis.
China’s upcoming 15th Five-Year Plan, covering 2026-2030, targets ambitious climate goals of achieving carbon peaking by 2030 and carbon neutrality by 2060. Despite these aspirations, the energy sector remains heavily reliant on coal, which still constitutes about 51% of the country’s electricity supply as of mid-2025. This reliance underscores the significant challenges China faces in transitioning to greener energy.
One major issue is the inefficient distribution of renewable energy, particularly in western regions like Tibet, Xinjiang, and Qinghai, which generate substantial solar and wind power. Unfortunately, due to limited grid capacity, much of this energy is lost when generation peaks, as the grid risks overloading. This problem, known as curtailment, prevents clean electricity from reaching high-demand areas in the eastern economic hubs such as Beijing and Shanghai.
To address these challenges, China must invest significantly in improving its energy infrastructure, focusing on enhancing transportation and storage of excess energy. The State Grid Corporation of China plans to spend 650 billion yuan (£69 billion) in 2025 alone to upgrade the power network, with potential for increased investment in following years. However, these capital-intensive projects must be balanced with economic pressures from lingering issues like the 2021 property crisis.
Overall, while China’s strategic plan demonstrates a commitment to environmental progress, tangible results will depend on overcoming infrastructural barriers and aligning economic conditions with ecological goals.