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China Clean Energy Transition to Focus on Integration, Industrial Decarbonization, Think Tanks Say

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China's clean energy transition is shifting toward system integration and industrial decarbonization, having largely solved the challenge of scaling renewables, according to an analysis by Agora Energy China and Agora Energiewende on Wednesday.

The country's wind and solar utilization rates fell below 95% in 2025, the report said, "highlighting growing system constraints as renewable capacity expands faster than grid flexibility and market integration."

Coal-producing regions also face the challenge of transforming fossil energy hubs into renewable energy bases.

System integration is critical to China's energy security, according to the think tanks. The country continues to rely on imports for more than 70% of its fuel needs, with several coal-to-chemical projects making only a small contribution.

The power system is also facing flexibility and reliability challenges as electricity demand continues to rise from expanding electric vehicle use, industrial electrification, and an artificial intelligence boom.

"Energy security for China increasingly depends not just on fuel supply but on integrating its abundant domestic renewable energy into the wider system," said Kevin Tu, Agora Energy China managing director.

"Accelerating grid and power market reform, strengthening demand-side response and enhancing cross-regional transmission can boost resilience against volatile global fossil fuel markets," Tu added.

On industrial decarbonization, Tu noted that technologies such as renewable hydrogen, electric heat and low-carbon materials are moving from demonstration to deployment, but their success hinges on availability of renewables-derived electricity and an integrated, flexible power system.

"China has established itself as a global leader in clean energy and electrification. Extending this success into heavy industry while retaining competitiveness and energy security will be critical both for China and for the global transition," said Markus Steigenberger, managing director at Agora Think Tanks.

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