Trillions of Yuan Pouring In, "Super Power Bank" Is the Fulcrum｜Chief Interview ⑰

The ongoing global large-scale model competition has sparked heated discussions about whether electricity is the ultimate competitive advantage.

In February 2026, the General Office of the State Council issued the “Implementation Opinions on Improving the National Unified Electricity Market System” (Guo Ban Fa [2026] No. 4, hereinafter referred to as “Document No. 4”), which proposes that by 2030, market-based electricity consumption will account for 70%. Almost simultaneously, State Grid Corporation announced its “14th Five-Year” fixed asset investment plan, totaling 4 trillion yuan, a 40% increase over the “13th Five-Year” plan. Various industrial and financial capital are pouring into the new energy sector in a “movement-like” manner, with many focusing on electricity.

On one side is top-level design; on the other is massive capital investment. Both point to a common theme: as the “planned electricity” accelerates toward “market-oriented electricity” transformation, how will investments in the power system reflect in the price of each kilowatt-hour through market transactions?

Data from the National Energy Administration shows that in 2025, the total electricity consumption across society first exceeded 10 trillion kWh. Such a large scale, in a macro environment where the Producer Price Index (PPI) remains weak, means that even slight fluctuations in energy costs can have ripple effects. Manufacturing is highly sensitive to electricity prices, and residents are equally sensitive—every mechanism of electricity pricing directly impacts the profits of millions of enterprises and the expenses of billions of households.

Meanwhile, new variables are emerging on the demand side. Large models like DeepSeek require immense computing power, which operates 24/7. Electricity costs account for 60-70% of data center operating expenses, and the additional load from computing infrastructure is seen as a significant source of incremental electricity demand during the “14th Five-Year” period. Recently, leaders of China Electricity Council publicly estimated that during the “14th Five-Year” period, China’s annual new electricity consumption will be around 600 billion kWh.

On one hand, the proportion of renewable energy continues to rise under the “dual carbon” goals; on the other, cost-sensitive manufacturing remains the foundation of China’s competitiveness. There is an urgent need for a unified national electricity market, yet cross-provincial and cross-regional trading faces practical barriers. These macro-level changes will ultimately impact ordinary people’s lives.

What issues are addressed by the 4 trillion yuan investment in the grid? Will market-oriented electricity prices fluctuate like oil prices? During summer peak usage, will households face unbearable spike prices? Are power-intensive companies, which consume large amounts of electricity, expected to pay higher costs for stability?

To explore these questions, Southern Weekly’s New Finance Research Center interviewed Professor Lin Boqiang, Chair Professor at Xiamen University School of Management and Director of the China Energy Policy Research Institute. Lin Boqiang is currently editor-in-chief of the international journal Energy Economics and an independent director at China National Offshore Oil Corporation (CNOOC). He has long been engaged in research on energy finance, energy and climate change, and has served as a senior energy economist at the Asian Development Bank. He authored Energy Finance and has deep expertise in the technical logic of power system operation and macroeconomic impacts of energy policies, with influential roles in electricity market reform, carbon trading, and green electricity mechanisms.

Professor Lin Boqiang (Photo provided by interviewee)

Electricity Price Reform Will Not Happen Overnight

Southern Weekly: Document No. 4 clearly states that by 2030, about 70% of electricity will be traded through market mechanisms, and a unified national market will be established. How do you view the acceleration of this electricity reform?

Lin Boqiang: In recent years, the trading of spot electricity markets has made significant progress. You might not notice it, but changes are already happening. For example, when you charge your electric vehicle during peak hours, you’ll find the price at charging stations is much higher than at midnight. This reflects the supply and demand relationship. In reality, people are gradually adapting to electricity price changes.

The National Development and Reform Commission (NDRC) also disclosed that by the end of 2025, China’s market-based electricity trading volume will reach 6.6 trillion kWh, accounting for 64% of total electricity consumption (excluding guaranteed and self-use electricity), up from less than 15% in 2015. This is not a “from zero to one” leap but a steady increase toward the 70% target.

Southern Weekly: The combined figures of 4 trillion yuan investment and 70% market-based electricity trading raise concerns about rising electricity prices. Will prices fluctuate like oil or stocks after marketization?

Lin Boqiang: Electricity price reform is a gradual process; it won’t happen overnight. It’s too early to say that electricity prices will become highly volatile assets with large-scale, high-frequency fluctuations.

While 4 trillion yuan is a huge investment, the scale of electricity consumption is also enormous—about 10 trillion kWh annually in China. Electricity consumption is still growing rapidly. Spreading this investment over several years means its impact on end-user prices isn’t as significant as some might think. Industrial competitiveness remains crucial for China, and industries are very sensitive to electricity prices. Therefore, market-oriented reform will be a slow, ongoing process.

Visual: Time-of-use electricity prices are now part of daily life.

Residential Electricity Will Remain a “Welfare” Benefit

Southern Weekly: So, in the short term, residents don’t need to worry too much about rising electricity prices?

Lin Boqiang: Correct. China’s electricity system has its unique characteristics. Residential electricity prices have long been kept relatively low, mainly subsidized by industrial electricity prices. The common misconception that “China’s manufacturing relies on cheap energy” isn’t entirely accurate. In fact, industrial electricity prices are not particularly cheap and have largely subsidized residential prices.

Southern Weekly: Why do industrial users subsidize residents?

Lin Boqiang: From a generation cost perspective, industrial electricity consumption is large and steady, so its costs are actually lower than residential electricity. Currently, China’s electricity pricing system makes residential prices much lower than industrial prices—meaning industries are effectively subsidizing residents. This model persists because China’s manufacturing competitiveness remains strong, and the cross-subsidy is absorbed without major issues. That’s why residential electricity remains a “welfare” benefit.

Southern Weekly: Do you expect this pricing structure to change?

Lin Boqiang: Long-term, as electricity market reform deepens, prices will more accurately reflect supply, demand, and costs. The surge in industrial electricity demand driven by computing power may eventually disrupt the current balance.

Overall, this will be a gradual process, considering societal capacity to absorb change. But with the rapid adoption of electric vehicles and increasing residential charging, future electricity price reforms for households are inevitable.

Building a Massive “Charging Bank”

Southern Weekly: Many industrial and financial capital are pouring into the new energy sector. Some believe this accelerates development, while others worry about “involution” and waste. What’s your view?

Lin Boqiang: The “movement-like” investment from finance makes sense because new energy is a visible, certain sector. Undoubtedly, this has accelerated China’s growth in wind, solar, and energy storage, but it also brings cyclical fluctuations—something common in all industries, not unique to new energy. It’s partly a necessary cost of explosive growth.

Recently, U.S. and Iranian tensions, and the closure of the Strait of Hormuz, have reaffirmed China’s strategic path: pursuing green transformation while ensuring energy security through renewable energy, energy storage, and electric vehicles replacing oil and gas.

Visual: Strait of Hormuz closure leads to rising energy prices.

Southern Weekly: State Grid plans to invest 4 trillion yuan during the “14th Five-Year” period. Where will this money be spent? Will it become a future cost for consumers?

Lin Boqiang: The main challenge for renewable energy is its instability. Wind and solar need to grow significantly, but their fluctuations require backup. Currently, coal power provides this backup—ramping up when renewables falter. However, as coal power utilization hours decline—say, from over 5,000 hours annually to around 4,000—the costs of maintaining standby capacity and personnel will increase, making it less economical long-term.

As wind and solar share increases, coal’s utilization hours will further decrease. The costs of instability must be borne somewhere, and energy storage is the long-term solution. Short-term, coal backup is cheap but costly over time; energy storage requires large upfront investment but is cheaper in the long run. Developing storage is a strategic choice.

Southern Weekly: Is energy storage both a strategic and core component?

Lin Boqiang: The most critical task during the “14th Five-Year” period is large-scale construction of new energy infrastructure, especially energy storage. Storage acts like a giant “charger”—storing excess electricity and releasing it when needed. Think of it as a huge “power bank.” Removing bottlenecks in storage will allow it to replace the increasingly expensive peaking coal plants.

Southern Weekly: How can storage costs be reduced? Can infrastructure investments help?

Lin Boqiang: Two approaches: one is technological breakthroughs—developing cheaper, longer-lasting batteries. But progress here is limited. The more practical approach is to scale up and reduce costs—similar to how solar panels went from expensive to cheap through mass production.

Besides State Grid’s 4 trillion yuan investment, the government will promote the growth of the energy storage industry through other channels. We need a “supercharger” network—large, interconnected storage units. Once storage bottlenecks are removed, unstable electricity can become stable, and the costs of wind and solar will further decline, ultimately stabilizing electricity prices.

Recently, the government introduced capacity-based electricity prices for grid-side energy storage, which is expected to trigger explosive growth in this sector.

Limited Cash Flow from Green Certificates

Southern Weekly: Document No. 4 mentions improving the green power certificate (GPC) system. For ordinary people, “green certificates” are unfamiliar. How do they relate to businesses and the public?

Lin Boqiang: Simply put, green certificates are the “ID cards” and “honor badges” for green electricity. Wind and solar power are intermittent, and the grid needs stable power; otherwise, households will experience flickering lights, and factories may shut down or restart unexpectedly. Theoretically, wind and solar can’t compete with thermal power in the market.

To promote green energy, we designed green certificates, which isolate the “green” value. According to the Renewable Energy Green Power Certificate Management Implementation Rules by the National Energy Administration, every 1,000 kWh of renewable energy generated earns one green certificate, issued monthly. Clean energy companies can sell these certificates to earn revenue to offset part of their generation costs. If a company purchases a green certificate, it indicates that its electricity is green, enhancing its environmental image and meeting international green standards.

Southern Weekly: How much market value do these certificates have?

Lin Boqiang: The cash flow they generate depends on their coverage and how they connect with the carbon trading market. Currently, China’s carbon prices are low, so the cash from green certificates is limited.

If future carbon prices rise significantly, green certificate prices may increase accordingly. But these are gradual processes.

Reducing Coal Power’s “Workload, Increasing Reserve”

Southern Weekly: Will coal power be phased out by then?

Lin Boqiang: That’s a misconception. No explicit plan to shut down coal power has been announced. In fact, the rapid growth of wind and solar in recent years has depended heavily on coal power backing. Without coal’s support, the technological progress and large-scale integration of renewables wouldn’t be possible. In this sense, coal power has contributed to clean development.

The current trend isn’t to eliminate coal power but to let it “do less work and stay on standby.” Utilization hours are decreasing, which is a form of phased exit—less generation means less carbon emission. To ensure these coal plants can be called upon during critical times (e.g., windless, sunless winter or summer peaks), they need a “capacity payment” to cover fixed costs. This is the recent capacity price mechanism.

Southern Weekly: How is this mechanism working?

Lin Boqiang: In January 2026, the NDRC and NEA issued the “Notice on Improving the Capacity Price Mechanism for Power Generation” (Fagai Jia Ge [2026] No. 114), which proposes differentiated capacity price mechanisms for coal, gas, pumped storage, and new energy storage, and aims to establish a reliable capacity compensation system after the spot market is operational.

This mechanism is functioning well, ensuring system stability during the transition.

Breaking Down the “Walls” Between Three Markets

Southern Weekly: Recently, China’s AI model usage has surged, consuming enormous electricity. Will this put more pressure on system stability?

Lin Boqiang: Data centers require extremely reliable power; even a few minutes of outage can cause millions in losses. This adds new peak regulation demands on the grid.

Currently, the “East Data, West Computing” initiative and “computing and electricity coordination” are promoting data centers in western regions rich in renewable energy, directly powered by local wind and solar, with increased green electricity use. Policies like the Opinions on Deepening the “East Data, West Computing” aim for over 80% green electricity in new data centers by 2025. Pilot projects in Gansu Qingshan are exploring direct, stable green power supply to data centers.

Southern Weekly: Document No. 4 emphasizes “establishing a unified national electricity market,” but inter-provincial barriers exist. You mentioned “breaking down” these barriers in your interpretation.

Lin Boqiang: The document highlights issues like integrating large grids with local grids. But deeper issues are the barriers between provinces. Different resource endowments, economic levels, and regional demands create conflicts—coal-rich provinces want better prices for their electricity; industrial provinces want cheaper power; some fear that imported electricity will impact local taxes and employment.

Often, these are not purely technical issues. These barriers are complex and won’t be dismantled overnight. We can only aim for resource optimization—start with mutually beneficial transactions, establish rules, and let the market operate. Over time, this will demonstrate the benefits of cross-provincial trading. It requires wisdom and patience.

Southern Weekly: What is your core recommendation for future electricity market reforms?

Lin Boqiang: Further advancing a unified national market is essential. But I believe the key is to connect the electricity market, carbon trading market, and green power certificate market—breaking down the “walls” between them—to form a coherent, transmittable price signal.

Relying solely on the electricity market risks accumulating transition costs in generation and grid sectors. If the carbon and green certificate markets are also linked, making fossil fuel use costly and green power profitable, the costs will be transmitted more smoothly along the industry chain, leading to genuine energy savings and emission reductions. A more efficient, greener system benefits everyone—cleaner air, safer energy supply, and more reasonable electricity prices. This process takes time and requires societal effort.