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E-mail China Daily, February 25, 2025
As the country's energy sector is shifting toward greater market-driven dynamics, private companies will be further encouraged to invest in energy development, utilization and infrastructure construction, according to China's top energy authority.
The government will continue promoting private sector involvement in major energy projects this year, including nuclear power, energy storage and smart grids, to deliver a more efficient and smooth operation of the market, according to the National Energy Administration.
The administration will continue encouraging private enterprises to participate in the nuclear power industry's supply chain and to invest in nuclear power projects. Furthermore, the government will continue to support private companies in various forms of oil and gas exploration, power infrastructure construction and other projects, it said.
There will be an emphasis on supporting private businesses to invest in and build new technologies such as new energy storage, smart microgrids and innovative business models.
Private companies are expected to spur more technological innovation and increased efficiency within the energy sector, enhancing its overall competitiveness and sustainability, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
The energy sector requires substantial long-term investment for expansion, especially in emerging fields such as new energy storage and smart grids, he said.
China vows to further deepen its energy market reform this year, working to improve mechanisms where energy prices are mainly determined by the market, legally regulate the energy market order and strengthen the construction of a unified national market.
Zhu Gongshan, chairman of GCL (Group) Holdings Co Ltd, China's largest private power conglomerate, said a more market-driven energy sector could lead to increased efficiency in the allocation of resources.
China's solar power sector, from upstream silicon production to downstream photovoltaic power station construction, exemplifies the growing role of China's private economy in energy transformation, he said.
To deepen market-oriented price reforms of new energies, the National Development and Reform Commission and the National Energy Administration issued a notice recently to promote the integration of new energy sources like wind and solar power into the electricity market.
This means that around 80 percent of China's power consumption and generation will be transacted through competitive markets, significantly up from the 61 percent traded in 2024, according to Deng Simeng, a senior analyst for renewables and power research at global consultancy Rystad Energy.
GCL Group said the company is very optimistic about the virtual power plant market in China, which, according to estimates by Huatai Securities, is projected to reach 10.2 billion yuan ($1.4 billion) this year and further grow to over 100 billion yuan by 2030.
A virtual power plant is a network of decentralized energy resources that are controlled via software to function as a single, flexible power source. It allows these dispersed resources to operate in a way that mimics the behavior of a traditional power plant, providing electricity to the grid or responding to changes in demand.
