China’s New Power System: How Computing and Energy Are Converging to Transform the Grid

China is in the middle of a massive energy transformation.

The country’s green energy ambitions aren’t just pipe dreams—they’re hitting real milestones.

As of March 2026, China has deployed over 130 million kilowatts of new energy storage capacity, and non-fossil energy now accounts for 21.7% of total energy consumption.

But here’s the thing: building a truly modern power system isn’t just about scaling up solar panels and wind turbines.

It’s about creating an entirely new ecosystem where computing power, renewable energy generation, energy storage, and grid infrastructure work in perfect sync.

This convergence—what industry leaders are calling “computing-power-electricity coordination”—is reshaping how China thinks about energy infrastructure.

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The Big Picture: Why China Is Obsessed With Building a New Power System

Let’s start with the obvious: China has serious energy goals.

The country has committed to achieving “dual carbon” targets—meaning carbon peaking and carbon neutrality.

To get there, China needs to do more than just add renewable capacity.

It needs to fundamentally rebuild how electricity is generated, stored, distributed, and consumed.

That’s where the concept of a “new power system” comes in.

Unlike traditional grids that rely on centralized coal plants, a new power system is decentralized, intelligent, and integrated with emerging technologies.

During China’s 2026 “Two Sessions”—the annual political gathering where top industry and government figures hash out policy—energy leaders laid out exactly what this transformation looks like.

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The Roadmap: What Industry Leaders Want From a New Power System

• Wen Shugang (Huaneng Group): Focuses on low-carbon infrastructure, 35% electrification by 2030, and using AI for grid cybersecurity.
• Jiang Yi (China Huadian): Proposes a system-wide overhaul including “sand, Gobi, desert” energy bases and modular hydrogen integration.
• Zhong Baoshen (LONGi): Advocates for solving the “last mile” via direct green power connection and “Source-Grid-Load-Storage” integration.
• Yang Jianyu (China Mobile): Promotes “Computing Power Following Electricity” (moving AI tasks west) and “Electricity Following Computing Power” (grid upgrades).

Low-Carbon, High-Resilience Infrastructure

Wen Shugang (温枢刚), Chairman of China Huaneng Group (Zhongguo Huaneng Jituan 中国华能集团) and a member of the Chinese People’s Political Consultative Conference (CPPCC), is pushing for a low-carbon and zero-carbon power system.

His vision includes:

• Strengthening the resilience of main grids, distribution networks, and micro-grids
• Increasing the proportion of electricity in final energy consumption
• Targeting a national electrification rate of approximately 35% by 2030
• Using AI to boost anti-disturbance capabilities and strengthen cybersecurity defenses

The last point is crucial: as grids become smarter and more distributed, they also become more vulnerable to digital attacks.

AI-powered defenses are no longer optional—they’re essential infrastructure.

A Total System Overhaul

Jiang Yi (江毅), Chairman of China Huadian Corporation (Zhongguo Huadian Jituan 中国华电集团), pushes back against the idea that building a new power system is just about swapping energy sources.

“It’s a comprehensive innovation of concepts, technologies, and mechanisms,” he argues.

His prescription for getting there:

• Expand massive new energy bases in northwest China’s “sand, Gobi, and desert” regions
• Build integrated water-wind-solar projects in the southwest
• Scale up offshore wind power
• Explore emerging formats like hydrogen-based energy, zero-carbon parks, and computing-power-electricity coordination
• Optimize and upgrade traditional energy sources—including building a new generation of efficient coal-fired plants and expanding gas-fired capacity where needed

Notice what’s happening here: China isn’t abandoning fossil fuels overnight.

Instead, it’s creating a mixed portfolio where renewables scale up, storage handles volatility, and traditional sources provide stability during the transition.

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The “Last Mile” Problem: Getting Green Power to Where It’s Needed

Here’s an interesting tension in China’s energy strategy.

In 2025, non-hydro renewable energy accounted for 24% of total generation—a massive jump.

But when you look at actual green power consumption at the end-user level, the penetration rate is surprisingly low compared to countries like Germany.

Why?

Because generating renewable energy and actually getting it into the hands of factories, data centers, and households are two different problems.

Zhong Baoshen (钟宝申), Chairman of LONGi Green Energy (Longji Lünen 隆基绿能), calls this the “last mile” of green power consumption.

His solution: “direct green power connection” and large-scale deployment of “Source-Grid-Load-Storage integration”.

What does this actually mean?

• Build new energy transmission lines that connect renewable sources directly to industrial parks and computing hubs
• Enable the “bits chasing watts” model—where data centers and energy-intensive computing move to where clean power is abundant (like Qinghai)
• Create cross-regional benefit-sharing mechanisms so nobody gets left holding the bag
• Establish physical traceability systems that prove green power actually came from renewable sources
• Improve metering systems for hybrid “direct connection + storage/green hydrogen” arrangements

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The Hot Trend: Computing-Power-Electricity Coordination

If you’ve been following Chinese tech infrastructure, you’ve probably heard about “computing-power-electricity coordination” (Suan Dian Xie Tong 算电协同).

This is where things get really interesting.

Essentially, it means matching energy-intensive computing workloads with renewable energy generation, rather than building data centers where it’s convenient.

Yang Jianyu (杨剑宇), Chairman of China Mobile Zhejiang (Zhongguo Yidong Zhejiang Gongsi 中国移动浙江公司), sees this as a two-way street:

“Computing Power Following Electricity”

Move high-load, high-energy-consumption AI training to western regions where cheap renewable energy is abundant.

Instead of forcing wind and solar plants to ship power thousands of miles east, ship the compute jobs west.

“Electricity Following Computing Power”

Speed up west-to-east power transmission infrastructure and build cross-provincial power channels.

East China (where most of the population and existing data centers live) needs to invest in local power infrastructure to support real-time AI applications.

The underlying insight: computing and electricity infrastructure need to be planned as a single, integrated system, not as separate industries bumping into each other.

What Needs to Happen Next

Chen Anwei (陈安伟), Chairman of State Grid Zhejiang Electric Power (Guowang Zhejiang Dianli 国网浙江省电力有限公司), is calling for the national government to issue technical guidelines and standards ASAP:

• Zero-carbon park planning standards
• Grid connection and operation specifications
• Carbon emission calculation methodologies
• Clear market status and trading rules for direct green power, micro-grids, and virtual power plants
• Settlement mechanisms that actually work

Without this regulatory clarity, companies don’t know how to structure deals or price risk.

The market stalls.

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The Storage Problem: Why Energy Batteries Are Stuck in Regulatory Limbo

Here’s where things get complicated.

China has deployed massive amounts of new energy storage capacity, but the market mechanics around storage are broken.

Liu Hanyuan (刘汉元), Chairman of Tongwei Group (Tongwei Jituan 通威集团), explains the core problem:

When you build renewable energy plants, you generate power.

If the grid doesn’t need it right then, you either have to dump it (waste) or store it.

Storage is supposed to hedge this risk.

But because the dispatch rules and ownership/benefit mechanisms are unclear, storage often fails to function as an actual tool for power generators.

Result: Power generation companies are stuck in a bind of “limited output, reduced income, and failing tools.”

Liu’s fix: Clarify storage classification standards and scheduling responsibilities immediately.

The key principle should be: “whoever invests, benefits, and leads.”

In other words, if a power company builds storage for its own needs, it should have autonomous control over how that storage is used (within grid safety constraints).

The Pricing Problem

Zhang Tianren (张天任), Chairman of Tianneng Holding Group (Tianneng Konggu Jituan 天能控股集团), points out another issue:

Storage provides multiple valuable services to the grid:

• Frequency regulation
• Peak demand smoothing
• Rapid response during emergencies

But the current market mechanism doesn’t capture the full value of these services.

Energy storage providers get paid for some things but not others.

Result: Storage doesn’t earn enough to justify the investment, so fewer storage projects get built.

Zhang’s recommendation: Improve auxiliary service market mechanisms so storage gets paid for the actual value it provides.

Creating Real Market Competition

Yao Jinjian (姚金健) from Gotion High-Tech (Guoxuan Gaoke 国轩高科) takes a broader view:

The storage market needs:

• Better price formation mechanisms that actually reflect supply and demand
• Unified national capacity compensation standards so companies know the rules nationwide
• Full participation in mid-to-long-term markets, spot markets, and auxiliary service markets
• New business models like “shared storage”—where multiple parties can use the same storage asset
• Optimized tax policies to encourage rational investment instead of “blind influx” and destructive price wars

Without these fixes, the storage market will keep oscillating between boom (when subsidies are generous) and bust (when competition drives prices down and nobody makes money).

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The Bigger Picture: Why This Matters Beyond China

China’s energy transition isn’t just a domestic story.

The technology and business models being pioneered here—computing-power-electricity coordination, direct green power connection, shared storage—are getting attention globally.

Countries from Europe to Southeast Asia are watching how China solves the chicken-and-egg problem of: How do you scale renewables when they’re inherently variable?

The answer isn’t just “build more batteries.”

It’s building smarter systems where generation, storage, demand, and computing are all coordinated in real time.

If China gets this right, it becomes the template for how the world transitions to clean energy.

If it gets it wrong, it becomes a cautionary tale about good intentions meeting messy market mechanics.

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The Takeaway

China’s new power system represents one of the largest infrastructure transformations happening anywhere in the world right now.

It’s not just about deploying renewable energy capacity—though that’s happening.

It’s about creating an integrated ecosystem where:

• Energy and computing infrastructure are planned as a unified system
• Storage actually works as a market participant, not a regulatory afterthought
• Green power reaches end users through direct connections instead of being lost in transmission
• AI and advanced controls manage a vastly more complex grid
• Old and new energy sources coexist during the transition period

The heavy lifting on this project is just beginning.

And for investors, founders, and technologists, understanding how computing-power-electricity coordination and the new power system actually work isn’t academic—it’s becoming essential business knowledge.

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References

• Synergy Between Power and Computing: Accelerating the Construction of a New Power System – Securities Times
• Official Website of China Huaneng Group – China Huaneng Group
• Official Website of China Huadian Corporation – China Huadian Corporation
• LONGi Chairman Zhong Baoshen’s Proposals at the Two Sessions – LONGi Green Energy