In the 2025-2026 National Power Supply and Demand Situation Analysis and Forecast Report released by the China Electricity Council (CEC) on February 2, it is predicted that China’s total social electricity consumption will rise by 5% to 6% year-on-year in 2026.Given China’s economic growth potential, proposals for the 15th Five-Year Plan for national economic and social development, and national macro-control policies, China’s macro economy will maintain steady growth in 2026, driving sound and relatively fast growth in power consumption demand.

Based on the projected GDP growth of around 5%, recent power consumption elasticity coefficients and multi-method forecasts, the CEC estimates that the national total social electricity consumption will reach 10.9 trillion to 11 trillion kWh in 2026, with a year-on-year growth of 5%-6%. The nationwide unified peak power load is expected to hit 1.57 billion to 1.63 billion kilowatts.

In terms of power supply, China’s installed solar power capacity is set to exceed that of coal-fired power for the first time in 2026. By the end of the year, the combined installed capacity of wind and solar power will account for half of the country’s total installed power capacity.

Driven by the national dual-carbon goals, new energy sources will continue to witness large-scale capacity expansion. The newly added installed power capacity in 2026 is expected to exceed 400 million kilowatts, including over 300 million kilowatts of new energy capacity. The newly added effective power generation capacity will stand at about 100 million kilowatts, basically matching the increment of peak power load.

Wind and solar power combined will take up roughly half of the total installed capacity, with solar power installed capacity surpassing coal-fired power for the first time. By the end of 2026, the national total installed power capacity will reach around 4.3 billion kilowatts. Among them, non-fossil energy installed capacity will hit 2.7 billion kilowatts, accounting for about 63% of the total; the share of coal-fired power capacity will drop to around 31%.

In view of rising power demand, newly commissioned power sources and power grids as well as primary energy supply conditions, the overall national power supply and demand will stay balanced in 2026, while tight power supply will occur in some regions during peak hours, which can be basically eased via inter-provincial and cross-regional power allocation.

During summer peak periods, power supply and demand will remain tight in parts of Southwest, Central and East China. Power supply and demand will stay generally balanced nationwide in winter. In case of extreme weather or tight primary energy supply, local power shortage may occur in certain periods, which can be addressed through joint efforts on both supply and demand sides to guarantee stable power delivery.

New energy installed capacity has repeatedly hit new highs in recent years. Statistics show that China added 550 million kilowatts of new installed power capacity in 2025, an increase of 110 million kilowatts year-on-year. The combined newly added wind and solar power capacity reached 440 million kilowatts, taking up 80.2% of the total newly built power capacity.

Last year, newly increased power generated by wind power, solar power and biomass energy accounted for 97.1% of the national newly added electricity consumption, becoming the main driver of electricity consumption growth.

By the end of 2025, the national installed non-fossil energy power capacity reached 2.4 billion kilowatts, up 23.0% year-on-year and accounting for 61.7% of the total installed capacity, a year-on-year increase of 3.5 percentage points.Breakdown:

Nevertheless, structural imbalance in the power system has become increasingly prominent. The growth of system fluctuation regulation capacity fails to keep pace with the rapid expansion of new energy. Featuring strong randomness and volatility, new energy requires matching flexible power sources to ensure stable power supply during output shortage and power shortage periods, while operating at low load or offline in other periods.

Efforts to improve power system regulation capacity are also accelerating. Last year, newly commissioned gas-fired power capacity and pumped storage capacity reached 19.92 million kW and 7.48 million kW respectively, further enhancing the system’s peak regulation capability.

On January 30, the National Development and Reform Commission issued the Notice on Improving the Generation-side Capacity Price Mechanism (FGJG〔2026〕No.114), which improves categorized capacity price mechanisms for coal-fired power, gas-fired power, pumped storage and new energy storage.

Through institutional arrangements such as guaranteed basic revenue and equal pay for equal work, the policy delivers clearer, stable and sustainable profit expectations for flexible power sources. It also puts forward a roadmap for shifting from capacity price mechanism to reliable capacity compensation mechanism for the first time. This move helps strengthen power security guarantee, mobilize enthusiasm for flexible power source construction, improve peak shaving capability, facilitate new energy consumption and accelerate the green and low-carbon energy transition.

Reporter: Yang Yang