Chinese Grid Operators Resist Plans To Boost Renewables To Power AI

Energy News Beat

China’s aggressive push to power its rapidly expanding AI data centers with renewables is running into practical resistance from grid operators, who warn that the sector’s inflexible power demands could increase reliability risks and complicate grid planning.

Industry analysts and officials told Reuters that Beijing’s strategic goal of having renewables supply the majority of electricity to data centers by 2030 may prove difficult to achieve.

The Scale of China’s Data Center Expansion

China is building data centers at a furious pace to support its AI ambitions. As of April 2026, the country had approximately 369 data centers.

Power capacity stood at around 32 GW at the end of 2025 and is projected to reach roughly 60 GW by 2030.

Electricity demand from Chinese data centers is expected to surge significantly. The International Energy Agency (IEA) projects an increase of around 175 TWh by 2030 (up ~170% from 2024 levels), making China one of the two largest drivers of global data center power growth alongside the United States.

Other estimates suggest data center power demand could reach 400–600 TWh by 2030 in more aggressive scenarios.

China’s Current Energy Mix

China’s overall electricity generation in 2025 was approximately 42% from clean sources (hydropower ~13%, wind + solar ~22%), with fossil fuels (primarily coal) accounting for 58%.

Coal’s share of generation fell for the first time in a decade, dropping by 71 TWh year-on-year, as massive renewable additions outpaced demand growth in key periods.

However, coal remains the dominant source overall. For data centers specifically, the picture is even more coal-heavy. According to the IEA’s Energy and AI report, as of 2025 China’s data center electricity supply was dominated by coal (~70%), followed by renewables (~20%), nuclear (~10%), and natural gas for the remainder.

Government Ambitions Meet Grid Operator Pushback

China’s 2026 government work report emphasizes better integration between computing infrastructure and power networks, with an explicit goal of renewables covering 80% of data center power consumption by 2030 (up from 11% in 2023 per some metrics).

Policies include provincial co-location mandates and prioritizing data center construction in renewables-rich western China. The IEA projects that solar PV and wind could add nearly 90 TWh of electricity for data centers by 2030, supported by a rising renewable share in the overall grid mix.

Yet grid operators are resisting aspects of this push. Pei Shanpeng, a director at State Power Investment Corporation, told a recent Beijing industry conference: “From what we understand, they [data centers] cannot really adjust power consumption load much. GPUs are very expensive, so once they are purchased, operators want to use them as quickly and as intensively as possible.”

Wang Zelin from State Grid Jibei Electric Power Research Institute noted that even modest flexibility (e.g., 15% adjustable loads) could significantly ease capacity expansion pressure over the next 3–5 years.

Grid operators are particularly wary of direct “green power” links to data centers. These could reduce electricity sales through the main grid and make it harder to recover investments in transmission and distribution infrastructure if demand proves volatile.

The data center sector is viewed as a poor fit for high renewable penetration because peak demand is difficult to forecast and loads are relatively inflexible compared to industries like aluminum smelting.

Innovative Experiments Underway

Despite the hurdles, China is experimenting with novel solutions. In 2026, the country launched what it claims is the world’s first offshore wind-powered underwater data center demonstration project in Shanghai Lingang. The 24 MW facility, developed by HiCloud Technology and state-owned China Communications Construction, uses seawater for cooling and offshore wind for power.

Outlook and Implications

Between 2024 and 2030, the IEA expects coal to remain the largest source of additional electricity for Chinese data centers (~90 TWh), roughly matching the contribution from renewables. After 2030, renewables and nuclear are projected to push coal’s share into decline, reaching nearly 60% clean power for data centers by 2035.

The tension highlights a broader challenge: while China leads the world in renewable capacity additions and is rapidly decarbonizing parts of its power sector, the unique demands of AI infrastructure — constant, high-intensity, and hard-to-predict loads — create friction with grid stability and investment recovery priorities.

As data center power demand is forecast to represent a meaningful portion (around 18% in one estimate) of China’s total electricity demand growth through 2030, resolving these integration issues will be critical for both China’s AI competitiveness and its energy transition goals.

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