Rapid renewable expansion, electrification, and grid modernization are reshaping China from the world’s largest fossil-fuel importer into a potential electricity-based energy superpower.
China’s energy transition is entering a new strategic phase in which renewable electricity is being positioned not merely as a decarbonization tool, but also as a direct substitute for imported fossil fuels.
Speaking at the Boao Forum for Asia 2026 in Hainan, Qian Zhimin, chairman of the International Forum on Clean Energy (IFCE), noted that every additional 1,000 GW of renewable energy capacity could theoretically replace around 100 million tonnes of oil equivalent through electrification and green-fuel substitution.
Based on that calculation, China would require approximately 5,000 GW of installed renewable capacity to broadly offset its current crude-oil import dependence. The proposition is particularly notable given the scale of China’s oil imports. According to China Customs, China imported 577.7 million tonnes of crude oil in 2025, equivalent to around 11.2 million barrels per day, with import dependence at 76% of total consumption.
The opinion reflects a broader shift in China’s energy strategy: the transition from a “petroleum economy” toward what policymakers increasingly describe as an “electricity economy” built on renewable generation, ultra-high-voltage (UHV) transmission, energy storage, and electrified end-use consumption.
The implications extend far beyond China’s domestic energy system. A successful transition could reshape global commodity markets, alter energy geopolitics, and redefine industrial decarbonization pathways worldwide.
Renewable energy as “green oil”
The opinion presented at Boao reframes renewable electricity as a form of “green petroleum” capable of replacing fossil fuels across transportation, industry, chemicals, and heating.
Historically, oil has functioned as a highly concentrated and transportable energy carrier. China, despite being the world’s largest renewable energy producer, remains heavily dependent on imported crude oil. That reliance exposes the economy to geopolitical risks, maritime chokepoints, and commodity-price volatility.
Renewable electricity changes the equation when combined with electrification technologies and green-fuel conversion systems.
Large-scale renewable deployment can support not only low-carbon power generation, but also the production of green hydrogen, synthetic fuels, and renewable chemical feedstocks. In this framework, renewable electricity increasingly substitutes not only fossil-fuel power generation, but also oil-derived industrial inputs.
This is strategically significant because it links renewable deployment directly to energy security rather than solely climate policy. For policymakers, renewable expansion delivers dual benefits:
- Lower carbon emissions
- Reduced dependence on imported hydrocarbons
That combination is becoming central to China’s long-term energy planning and industrial policy.
The scale of China’s energy transition
China’s energy system already operates at a scale unmatched globally.
According to the National Energy Administration, China’s total primary energy production exceeded 5 billion tonnes of standard coal equivalent for the first time in 2025, reaching 5.13 billion tonnes.
Domestic production included:
- 216 million tonnes of crude oil
- 262 billion cubic metres of natural gas
- Record levels of renewable electricity generation
At the same time, China remains one of the world’s largest hydrocarbon importers, underscoring the magnitude of its energy demand and industrial base.
Electricity consumption exceeded 10,000 TWh in 2025, more than twice annual US electricity demand and larger than the combined electricity consumption of the European Union, Russia, India, and Japan.
Within that enormous power system, renewable energy is rapidly approaching the status of a primary power source.
Official data show China generated 3,990 TWh of renewable electricity in 2025, up 15% year-on-year and accounting for approximately 38% of total generation. That figure exceeded the combined electricity consumption of China’s tertiary sector and residential households.
The expansion trajectory remains steep. By the end of 2025, China’s combined installed wind and solar capacity reached 1,840 GW, accounting for 47% of total installed power capacity and surpassing thermal power for the first time. New wind and solar installations alone exceeded 430 GW during the year.
These numbers increasingly position China not only as the world’s largest renewable-energy market, but also as the largest test case for managing an electricity system with very high renewable penetration.
Infrastructure resilience as strategic advantage
China’s energy transition strategy differs from many Western models because it combines renewable expansion with large-scale investment in infrastructure resilience.
Officials increasingly describe China’s energy-security architecture as a three-part system built around:
- Oil and gas pipeline networks
- Power-equipment manufacturing
- Integrated energy supply chains
Despite rapid renewable expansion, conventional energy infrastructure remains substantial. China’s oil and gas pipeline network now exceeds 200,000 kilometres, while annual natural gas transmission capacity has surpassed 400 billion cubic metres. Gas storage capacity reached 54 billion cubic metres in 2025.
This infrastructure proved critical during severe winter weather in January 2026, when China’s national trunk gas network delivered a record 1.1 billion cubic metres of natural gas in a single day during a nationwide cold wave.
At the same time, China has established dominant manufacturing positions across several energy technologies. Industry estimates indicate that:
- China accounts for roughly 35–40% of the global grid-equipment market
- Global market share for UHV equipment exceeds 70%
- Transformer exports account for approximately 35% of global supply
- Domestic localization rates for core UHV equipment exceed 95%
These capabilities provide China with unusual vertical integration across generation, transmission, equipment manufacturing, and infrastructure deployment.
In strategic terms, this means China is not merely deploying renewable energy at scale; it is also building industrial control over much of the enabling hardware required for the global energy transition.
Electrification: already reducing oil demand
The clearest evidence of renewable substitution is emerging in transportation. China’s electric-vehicle market has reached unprecedented scale. By the end of 2025, the country’s new-energy vehicle fleet exceeded 43 million units.
According to official estimates, electrification now reduces crude oil consumption by approximately 85 million tonnes annually, equivalent to lowering overseas oil dependence by roughly 15%.
China’s battery industry has become central to this transformation. Global power-battery demand exceeded 1,100 GWh for the first time in 2025, with Chinese manufacturers accounting for more than 70% of the global EV battery market. CATL and BYD remain the industry’s dominant players.
This creates a reinforcing industrial cycle:
- Renewable electricity powers EV charging
- Domestic battery manufacturing scales rapidly
- Oil demand declines
- Grid utilization improves
- Renewable deployment becomes more economically valuable
The combination of electrified transport and renewable power generation is therefore reshaping China’s broader industrial structure.
Building the “new power system”
China formally introduced the concept of a “new power system dominated by renewable energy” in 2021. Since then, the framework has evolved into a comprehensive industrial strategy centred around five principles:
- Clean and low-carbon
- Secure and sufficient
- Economically efficient
- Supply-demand coordinated
- Flexible and intelligent
This reflects recognition that renewable-heavy systems require fundamentally different grid architectures from fossil-fuel-based power systems.
Unlike coal plants, wind and solar generation are variable and geographically dispersed. Managing high renewable penetration therefore requires:
- Ultra-high-voltage transmission
- Smart-grid systems
- Energy storage
- Flexible dispatch
- AI-based forecasting
- Demand-response systems
China has invested heavily across all of these areas.
By the end of the 14th Five-Year Plan period, the country had completed 14 major interregional power-export corridors, including 10 UHV direct-current transmission lines.
Cross-regional electricity transfers from northwestern China alone exceeded 411 TWh in 2025, allowing renewable-rich inland regions to supply coastal industrial centres more efficiently.
In many respects, these long-distance transmission systems are becoming the backbone of China’s future electricity economy, enabling renewable resources from western provinces to power the country’s eastern manufacturing hubs.
Green fuels and industrial decarbonization
One of the most strategically important dimensions of China’s transition is the emergence of green fuels and renewable industrial feedstocks.
China’s green-fuel industries have moved beyond laboratory research into large-scale demonstration and early commercialization. These include green hydrogen, green ammonia, green methanol, and renewable chemical feedstocks
Such sectors are increasingly viewed as the “second solution” in the global energy transition, complementing direct electrification where batteries alone are insufficient.
Heavy industry, shipping, aviation, and chemicals remain difficult to decarbonize through direct electrification. Hydrogen-derived fuels may provide viable alternatives.
China’s large renewable base could ultimately provide a structural cost advantage in these emerging sectors, particularly if renewable-electricity costs continue to decline.
From oil power to electric power
The broader narrative emerging from China’s energy transition is geopolitical as much as technological.
Historically, industrial powers have been defined by access to fossil-fuel resources and hydrocarbon supply chains. China lacked abundant domestic oil reserves and therefore became deeply dependent on imports.
Renewable energy changes that equation because solar panels, wind turbines, batteries, and grid systems can be manufactured domestically at industrial scale.
In effect, China is attempting to convert manufacturing capability into energy sovereignty.
The transition remains incomplete. Fossil fuels still play a central role in China’s industrial economy, and coal continues to dominate baseload power generation.
Yet the direction of travel is increasingly clear.
The combination of:
- Massive renewable deployment
- Electrified transportation
- Grid modernisation
- Energy storage
- Green fuels
- Industrial manufacturing scale
is gradually redefining the structure of the Chinese energy system.
If China succeeds in replacing a substantial portion of imported hydrocarbons with domestically generated renewable electricity and electrified consumption, it would represent one of the largest energy-system restructurings in modern economic history.
The consequences would extend far beyond emissions reduction, reshaping global oil demand, industrial competitiveness, supply chains, and geopolitical energy flows for decades to come.