China Says Tech Growth a Challenge to Predicting Energy Demand
(Bloomberg) China faces greater uncertainty in forecasting energy demand as structural changes in the economy and the rapid expansion of new industries reshape consumption patterns, according to a top government official.
Demand over the past five years surpassed the government’s expectations, said Ren Yuzhi, director‑general of the planning department at the National Energy Administration. The growth of artificial intelligence, electric vehicles and other emerging sectors is compounding the problem for energy planners trying to map out the next five.
Deliberations extend to potentially rethinking China’s geography and where electricity is consumed, after decades of building up power networks to serve the massive cities in the east.
“Forecasting future energy demand — especially electricity — is a key challenge in the next planning cycle,” Ren said in an exclusive interview on Friday, after his agency released more details on the energy component of China’s new five-year plan that runs through 2030.
“AI computing centers and the development of electric vehicles are important factors,” he said. “EVs, in particular, have seen faster growth in recent years — especially this year — and charging demand has risen significantly.”
Understanding future energy demand is critical for the planners guiding trillions of dollars in investment in China’s more centrally planned economy. The task is made more complicated by the country’s transition to cleaner but less consistent renewable energy.
China now expects an average annual increase in power demand of around 600 billion kilowatt-hours in the next five years, according to the NEA, which would be more than Germany produces in a year. That compares to 570 billion kilowatt-hours over the past five years, said Ren.
Marked Shifts
The implications of getting it wrong can be seen in the marked shifts in China’s energy policy over the past five years.
In 2021, planners estimated China would need about 4.6 billion tons of coal equivalent a year by 2025, a 14% increase from 2020 levels. Instead, demand grew so fast that total production ended up at 5.13 billion tons last year.
A series of power shortages in 2021 and 2022 led to an about-face in the country’s policy around coal. Authorities pushed miners to boost output to record levels and began approving hundreds of new coal-fired power plants.
China’s current plans call for peaking coal by 2030. To achieve that, clean energy will need to grow swiftly and be flexible enough to handle all additional demand.
Traditional industries like steel continue to consume vast amounts of energy, while new sectors like AI and advanced manufacturing are becoming important new sources of demand. At the same time, China wants to shift energy use from fossil fuels to electricity, which will add further strains to the grid, Ren said.
“We will not only need to meet traditional demand, but also the growing needs of people’s daily lives,” Ren said. “Increasingly, new areas are having a significant impact.”
Those new sources of demand are prompting policymakers to reconsider how energy and industrial capacity are geographically distributed, he said. Rather than continuing to transmit large volumes of electricity from western China to the eastern seaboard, authorities are weighing a shift toward relocating energy-intensive industries westward, closer to renewable resources.
“The western region has traditionally focused on exporting coal, electricity, and natural gas,” Ren said. “Going forward, it is more likely that the west will export finished products and computing power.”
©2026 Bloomberg L.P.
