Accelerating the New Power System: A Bright Future for New Energy

Driven by the "Dual Carbon" goals, China’s energy system is undergoing a profound transformation. The 2026 Government Work Report sends a clear signal: China is speeding up the building of a new-type power system. It aims to expand new energy capacity, improve green power consumption, and perfect energy storage systems. This will keep pushing the energy structure toward greener and lower-carbon development. As policies, technologies, and market mechanisms keep improving, the new energy industry is opening up even more room for growth.

Image Source：699pic.com

In recent years, China’s green energy has developed much faster. Data from the Government Work Report shows the first batch of new energy bases in desert, Gobi, and barren areas are mostly completed and put into operation. The installed capacity of new energy storage has exceeded 130 million kilowatts. Non-fossil energy accounts for 21.7% of total energy consumption. These figures show a deep change in China’s energy structure. New energy is playing a bigger and bigger role in the power system. At the same time, the country keeps building smart grids. It also develops new energy storage and expands green power use. New models like zero-carbon parks and zero-carbon factories are being rolled out quickly.

From the industry’s development logic, new energy is no longer just a way to generate power. It has become an important foundation for upgrading the whole energy system. Many power industry representatives said during the Two Sessions that building a new-type power system is not just about changing the energy structure. It is a systematic reform of ideas, technologies, and mechanisms. The future power system will be run together by main grids, distribution grids, and microgrids. Technologies like artificial intelligence will make the grid more resilient and stable. Also, China’s electrification level will rise further. The industry expects the national electrification rate to reach about 35% by 2030. This means electricity will replace more traditional fossil fuels in industry, transport, and construction. As a key part of power supply, new energy will see its market expand too.

As new energy installed capacity grows fast, how to improve green power consumption has become a key industry focus. China’s non-hydro renewable energy generation already accounts for a high share. But the use of green power at the end-user level still has room to grow. The industry is exploring many new models. One important direction is "direct green power connection". This means building new energy power sources near big industrial parks, data centers, and other high-power-use sites. It lets green power be supplied locally. Another model is "integrated source-grid-load-storage". It is being promoted step by step. This model plans power generation, grids, electricity use, and energy storage as a whole. It improves the overall efficiency of the energy system.

It is worth noting that the fast growth of the AI industry has brought new uses for new energy. The explosive rise in computing power demand is creating new scenarios. Some industry experts put forward the idea of "computing-grid coordination". This means matching computing power and power resources better. On one hand, power-hungry data centers and AI training facilities can be built in areas rich in new energy. This lets "computing power follow power". On the other hand, building stronger cross-region power transmission makes new energy power flow more efficiently to areas with high demand. This two-way matching of power and computing is becoming a new trend for the integration of energy and the digital economy.

Energy storage also plays a key role in building the new power system. As the share of new energy generation rises, the power system needs more regulation. New energy storage has become an important support to keep the grid stable. China’s energy storage industry is growing fast now. But the industry widely agrees its full market value has not been realized. Some enterprise representatives suggested during the Two Sessions that we should improve the mechanisms for energy storage to join the power market. This includes letting energy storage take part in the spot market, medium- and long-term transactions, and auxiliary service markets. We should also set up a fairer capacity compensation system. This way, energy storage services like peak shaving and frequency regulation can get reasonable returns. As market mechanisms get better, the energy storage industry is expected to develop in a healthier and more sustainable way.

Overall, China’s energy system is moving from a traditional structure based on fossil fuels to a new pattern led by new energy. From building new energy bases in desert, Gobi, and barren areas, to direct green power connection and zero-carbon parks, to computing-grid coordination and market-based energy storage mechanisms—many policies and industry practices are speeding up the formation of the new-type power system. In this process, new energy is gradually changing from a "supplementary energy source" to a "main energy source".

Energy transition is never a short-term project. It is a systematic reform that will last for decades. As the power system keeps upgrading, green power use keeps expanding, and energy storage systems keep improving, the new energy industry still has huge room to grow. Looking further ahead, new energy is not just an important industry. It is becoming key infrastructure to support future economic development. The long-term outlook for the new energy industry remains highly promising!