China’s New Power System: Fueling the Future of Tech and Green Energy

China is making big moves with its new power system construction pilot program, and if you’re in tech, investment, or marketing, you’ll want to pay attention.

The National Energy Administration (Guojia Nengyuan Ju 国家能源局) dropped some major news on June 4.

They’ve launched the “Notice on Organizing the First Batch of Pilot Work for New Power System Construction.”

This isn’t just a small tweak; it’s a full-blown initiative to explore groundbreaking technologies and models.

The goal? To achieve major breakthroughs in how China generates, distributes, and uses energy.

What’s on the Agenda? Seven Key Pilot Directions

The pilot program is ambitious, tackling seven critical areas to build a robust and future-ready new power system:

• Grid-forming technology: Essential for a stable grid with high renewable penetration.
• System-friendly new energy power plants: Making renewables play nice with the grid.
• Smart microgrids: Localized energy solutions for resilience and efficiency.
• Coordination of computing power and electricity: A huge one for the tech world, more on this below!
• Virtual power plants: Aggregating distributed energy resources.
• Large-scale high-proportion new energy outbound transmission: Getting green energy where it’s needed.
• New generation coal power: Innovating within traditional energy sources.

This holistic approach signals China’s commitment to a comprehensive energy overhaul.

Powering the Digital Boom: Coordinating Computing Power and Electricity

This is where things get really interesting for anyone tracking AI, cloud computing, and data center growth.

The “Notice” highlights a laser focus on syncing up computing power needs with electricity supply.

Think about it: data centers are energy hogs, and their demand is only going up.

China’s plan targets:

• Key Regions Focused: National hub nodes and non-hub areas with rich energy resources (e.g., Qinghai, Xinjiang, Heilongjiang).
• Core Strategy: Integrate source, load, and storage for greener data center energy supply.
• Innovative Model: Implementing the “Green Electricity Aggregated Supply” model.
• Technological Solutions: Joint forecasting, flexible load control, intelligent scheduling.
• Efficiency Measure: Strengthening data center waste heat recovery and utilization.
• Supply Stability: Exploring combined operations of CSP with wind and PV power.

• Key Regions: Pilot projects will concentrate in national hub nodes and non-hub areas with rich energy resources. We’re talking places like Qinghai (Qinghai 青海), Xinjiang (Xinjiang 新疆), and Heilongjiang (Heilongjiang 黑龙江).
• Green Electricity First: The strategy is to scientifically integrate source, load, and storage. This means coordinating the green electricity demand of both existing and upcoming data centers with local new energy resources.
• The “Green Electricity Aggregated Supply” Model: This is a cool concept. It involves:
  • Nearby supply.
  • Aggregated transactions.
  • Local consumption of new energy.

  The aim? To jack up the proportion of green electricity powering data centers. This is huge for sustainability goals.

• Smarter Systems:
  • Joint forecasting of computing power load and new energy generation.
  • Flexible control of computing power load (think demand-response for data centers).
  • Intelligent scheduling.

  These tech solutions will boost source-load coordination and, crucially, reduce the grid’s required capacity during peak load hours. That means less strain and more efficiency.

• Waste Heat Recovery: Data centers generate a lot of heat. The plan emphasizes strengthening efforts to recover and utilize this waste heat, further improving energy efficiency.
• Boosting Stable Supply: The notice also supports exploring combined operations of concentrated solar power with wind and photovoltaic (PV) power. This combo can enhance the stability of clean energy supply, which is vital for power-hungry, always-on data centers.

Why this matters to you: As AI and big data explode, their energy footprint is a major concern. China’s proactive approach to power its digital infrastructure with greener, smarter electricity solutions could set a global precedent. This initiative directly supports the growth of the digital economy by making it more sustainable.

Reinventing an Old Player: The Future of New Generation Coal Power

While the push for renewables is strong, China is also looking at how traditional energy sources can evolve.

The “Notice” outlines a plan for new generation coal power, aligning with targets in the “Implementation Plan for the New Generation Coal Power Upgrade Special Action (2025-2027).”

Here’s the lowdown:

• Pilot Focus: Eligible existing and new coal units are encouraged to run pilot projects. These will target two main categories of performance indicators:
  • Clean decarbonization: Reducing the carbon footprint.
  • Efficient regulation: Improving flexibility and grid support.
• Dual-Purpose Pilots: They’re also encouraging pilots that hit both clean decarbonization and efficient regulation targets simultaneously.

• Policy & Institutional Reform: Actively carrying out reforms to resolve policy bottlenecks.
• Financial Backing: Leveraging funding channels like ultra-long-term special national bonds.
• Prioritized Capacity: Pilot project capacity receives priority arrangement from the NEA.
• Synergy with Renewables: Encouraging coal units to operate jointly with new energy projects and prioritizing their grid connection.

The government isn’t just setting targets; it’s providing support:

• Policy & Institutional Reform: Energy authorities at all levels, agencies dispatched by the National Energy Administration (Guojia Nengyuan Ju 国家能源局), and central enterprises are tasked with actively carrying out institutional reforms. This means cutting through red tape and resolving policy bottlenecks to help these pilot projects succeed.
• Financial Backing: They plan to coordinate and leverage funding channels, including ultra-long-term special national bonds, to support projects that align with policy requirements.
• Prioritized Capacity: The scale of coal power needed for these new generation pilot projects will get priority arrangement from the National Energy Administration within the state-determined planned construction scale (under total capacity control).
• Synergy with Renewables: Support is provided for existing coal units undergoing upgrades, new units, and new generation pilot units to operate jointly with new energy projects. Plus, these jointly operated new energy projects are encouraged to get priority grid connection.

Why this matters to you: This signals a pragmatic approach to energy transition. While green energy is the future, ensuring grid stability and energy security during the transition often requires leveraging and improving existing infrastructure. For investors, this highlights continued, albeit evolving, opportunities in the conventional energy sector, especially in technologies that reduce emissions and improve flexibility.

The Bigger Picture: Power Market Reforms and National Ambitions

This pilot program doesn’t exist in a vacuum.

News from the National Energy Administration (Guojia Nengyuan Ju 国家能源局) on the same day (June 4) also mentioned that the 2025 power market construction capacity training class and power market construction work symposium were recently held in Kunming (Kunming 昆明), Yunnan (Yunnan 云南).

The key takeaways from that meeting reinforce the national strategy:

• Top-Level Design: Improving the “1+6” basic rule system.
• Market Expansion: Advancing markets in Southern Region and Yangtze River Delta.
• Spot Market: Accelerating transition to continuous provincial spot markets.
• New Energy Integration: Promoting comprehensive participation of new energy in markets.
• 2025 Goal: Target of initially building a unified national power market.

• Improving Top-Level Design: Further refining the “1+6” basic rule system for the power market.
• Expanding Market Construction: Continuously advancing the power markets in the Southern Region and the Yangtze River Delta.
• Spot Market Transition: Accelerating the shift of provincial (regional, municipal) spot power markets to continuous operation. This is key for real-time price signals and efficiency.
• New Energy in the Market: Steadily promoting the comprehensive participation of new energy in market mechanisms.
• The 2025 Goal: Making every effort to achieve the target of initially building a unified national power market by 2025.

Why this matters to you: A unified, market-driven power system can lead to greater efficiency, better price discovery, and more opportunities for innovative energy solutions and new energy producers. This is fundamental for a modern economy and directly impacts the operational costs and sustainability efforts of all industries, especially tech.

What’s Next? A Greener, Smarter Energy Landscape

China’s pilot program for a new power system is a clear indicator of its commitment to an energy revolution.

By tackling everything from greening data centers to modernizing coal and reforming power markets, the nation is laying the groundwork for a more sustainable, efficient, and tech-forward energy future.

For those in the tech, energy, and investment sectors, these developments in China’s new power system construction are not just trends to watch – they are a roadmap of emerging opportunities and challenges.

References

• 国家能源局：新型电力系统建设试点启动 协同布局算力与电力项目 – Securities Times
• China Advances Energy Revolution for Economic Development – Xinhua News Agency
• Data Center Energy Policies Draw Attention – Securities Daily