In the first quarter of 2025, China’s total power generation rose by 5.5%, with wind and solar accounting for a staggering 93.2% of that growth in March alone. Solar power output grew by 30.8%, wind by 15.4%, hydro by 8.8%, and nuclear by 23.1%. Coal-fired power generation, by contrast, fell by 3.3% year-on-year.
By the end of Q1, solar and wind comprised 23% of total electricity generation, up from 19% the previous year. This clean power surge not only met all new electricity demand but also helped reduce coal’s share of the power mix from 61% to 55% year-on-year.
New capacity additions reflect the shift. In the first two months of 2025 alone, China added:
Despite shrinking demand from the real estate sector, steel and cement output—China’s two most carbon-intensive industries—showed modest recovery. In March:
Tangshan, Hebei—China’s industrial heartland and a notorious air pollution hotspot—recorded record-high blast furnace activity in early April. These gains are likely fueled by rising demand in manufacturing and exports.
However, this industrial rebound undermines emissions gains from the energy sector and underscores the slow pace of decarbonization in heavy industry. A recent analysis from CREA notes that overcapacity in blast furnaces is hurting profitability and delaying China’s green steel transition.
Despite gains in clean energy, air pollution metrics indicate a troubling trend. As of March 2025:
March saw sharp rises in PM2.5 in Jilin (+59%) and Ningxia (+62%)—partly attributed to the lifting of a government ban on straw burning. NO₂ levels in Shanghai, a key industrial hub, also remained elevated at 36 µg/m³, fueling secondary ozone formation.
Worst pollution episodes were recorded in cities like Shanghai (PM2.5), Qingyuan (ozone), and Wuhai (sandstorm PM2.5), pointing to complex regional air quality challenges.
Crude oil imports increased nearly 5% year-on-year in March, led by shipments from Iran and Russia, though refinery runs saw only a modest 0.4% rise—likely dampened by growing electrification of transport.
Natural gas imports fell 15% amid high inventories and weak demand from a mild winter, while domestic gas production rose by 5%.
Coal imports dropped 6.4%, marking the first post-COVID decline, while domestic coal output increased by 9.6%. The shift underscores a policy emphasis on energy security and self-reliance.
In anticipation of new pricing rules for renewables set to take effect in June 2025, solar cell production soared—reaching a record 712 GW annual output in March (+15% YoY). Meanwhile, new energy vehicle (NEV) production and exports rose by 48% and 44% respectively in Q1. NEVs captured 41% of March’s new car sales despite seasonal demand fluctuations.
China’s clean energy buildout is exceeding power demand growth, but industrial sectors and regional policies continue to hinder broader emissions reductions. As new regulations take effect in mid-2025, the effectiveness of China’s dual pursuit—economic stability and environmental reform—will become clearer. For global businesses, the key will be watching how Beijing balances industrial stimulus with increasingly urgent air quality and climate goals.
