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A Strategic Shift Toward Multi-Sector Renewable Integration

China is preparing to expand renewable energy use far beyond the electricity grid as part of its upcoming 2026–2030 Five-Year Plan, according to new guidance released by the National Energy Administration (NEA). The initiative aims to better absorb the country’s rapidly growing wind and solar output while accelerating the development of low-carbon fuels and industrial decarbonization.

The NEA’s opinion document calls for provinces and power producers to work closely with local governments to strengthen industrial foundations for green hydrogen, green ammonia, green methanol, and sustainable aviation fuel (SAF) — all positioned as critical elements of China’s next phase of energy transformation.

Green Hydrogen as a Cornerstone of Industrial Transition

Green hydrogen, produced by splitting water using renewable electricity, is being promoted as a versatile low-carbon solution for heavy industry and transport. It can power industrial processes, fuel vehicles, and serve as a feedstock for green ammonia and green methanol, widely used across fertilizers, shipping, and chemical manufacturing.

The NEA also encouraged coastal provinces to explore offshore wind–powered hydrogen production — a nascent but fast-emerging technology that could leverage China’s substantial offshore wind resources.

Renewables for Heating and Industrial Parks

Beyond fuels, the document highlights the need to deploy renewable energy for heating, particularly within industrial parks. Chinese energy planners view low-carbon industrial parks as pivotal to reaching national decarbonization goals, especially given that industry accounts for about 60% of the country’s electricity demand, according to the International Energy Agency.

Addressing the Growing Challenge of Curtailment

The urgency to diversify renewable consumption stems partly from curtailment — when wind or solar facilities produce more power than the grid can accommodate. China’s vast fleet of renewable installations, the largest in the world, periodically generates excess electricity, leaving clean energy underutilized.

Energy consultancy Wood Mackenzie projects that solar curtailment will exceed 5% across 21 Chinese provinces over the next decade. This marks a notable rise from the 10 provinces that experienced similar rates between January and August of this year, based on official statistics. Although still within China’s national limit of 10%, curtailment levels are expected to become a central topic for regulators during the next planning cycle.

Preparing for a Multi-Fuel, Multi-Sector Renewable Future

By broadening renewable applications — from hydrogen production to industrial heating — China is positioning itself to better manage its booming clean energy output while laying the groundwork for deeper decarbonization across multiple sectors.

The 2026–2030 plan signals a significant evolution in strategy: a shift from expanding capacity to integrating renewables more intelligently, efficiently, and widely across the nation’s economy.