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” period. Various industrial and financial capital are also pouring into the new energy sector in a “sprint,” with many focusing on electricity.

On one side is top-level design; on the other, massive investments. Both point to a common theme: “planned electricity” accelerating the transition to “market-based electricity.” 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. With such a large scale, even subtle fluctuations in energy costs can have ripple effects in a macro environment where the Producer Price Index (PPI) remains relatively weak. Manufacturing industries are highly sensitive to electricity prices, and residents are equally sensitive—how each kilowatt-hour is priced 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” plan, China’s annual new electricity consumption will be around 600 billion kWh.

On one hand, the proportion of renewable energy is rising under the “dual carbon” goals; on the other, cost-sensitive manufacturing remains the backbone 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 does the 4 trillion yuan investment in the grid aim to solve? Will market-oriented electricity prices fluctuate like oil prices? During summer peak usage, will households face unbearable spike prices? Are power-intensive companies, such as data centers, required 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 also the 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 possesses deep technical understanding of power system operations as well as macro insights into how energy policies influence the real economy. He has significant policy influence in areas such as 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 nationwide unified market will be established. How do you view the acceleration of this electricity reform?

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

The National Development and Reform Commission (NDRC) also disclosed that by the end of 2025, China’s market-based electricity transactions 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 make people worry 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.

Although the 4 trillion yuan investment is substantial, the scale of electricity consumption is also huge—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 imagine. Industrial competitiveness remains crucial for China, and industries are very sensitive to electricity prices. Therefore, market-based reform will be a slow, ongoing process.

Visual of Time-of-Use Pricing in 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 particular characteristics. Residential electricity prices have long been kept relatively low, mainly subsidized by industrial electricity prices. The common saying that “China’s manufacturing relies on cheap energy” isn’t entirely accurate. In fact, industrial electricity prices are not very cheap and have largely subsidized residential prices.

Southern Weekly: Why do industrial users subsidize residential electricity?

Lin Boqiang: From the perspective of generation costs, industrial electricity consumption is large and steady, so its costs are actually lower than residential electricity. Currently, China’s electricity pricing system keeps residential prices much lower than industrial prices—meaning industries are effectively subsidizing households. This model persists because China’s manufacturing competitiveness remains strong, and the cross-subsidy is manageable. That’s why residential electricity remains a “welfare” benefit.

Southern Weekly: Do you think this pricing structure will change in the future?

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

Overall, this will be a gradual process, considering societal capacity to absorb change. But as electric vehicle adoption accelerates and household charging demand grows, future electricity price reforms for residents will become 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 “sprint” of financial investment makes sense because new energy is a visible, certain track. Undoubtedly, this influx has accelerated China’s growth in wind, solar, and energy storage sectors, but it also brings cyclical fluctuations—something common in any industry, not unique to new energy. To some extent, explosive growth involves costs and risks.

Recently, U.S. actions against Iran 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 of Strait of Hormuz Closure and Rising Energy Prices

Southern Weekly: The 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 power utilization will further decrease. The costs of instability must be borne somewhere, and energy storage is the long-term solution. Short-term, building more coal capacity is cheap but becomes expensive over time. Investing in storage, which involves high initial costs but lower long-term costs, 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 the bottleneck in storage will allow it to replace the increasingly costly 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 slowing. 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 the 4 trillion yuan investment from State Grid, the government will promote the growth of the energy storage industry through other channels. We need a “supercharger” fleet. Once storage becomes affordable and reliable, the costs of wind and solar will further decline, stabilizing electricity prices in the long run.

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 (green certificate) system. For ordinary people, “green certificates” are unfamiliar. How do they relate to businesses and the public?

Lin Boqiang: Simply put, green certificates are like ID cards and medals 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. So, wind and solar can’t sell directly at the same prices as thermal power.

To promote green energy, we created 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 generation earns 1 green certificate, issued monthly. Clean energy companies can sell these certificates to earn revenue to offset part of their generation costs. If a company buys a green certificate, it indicates that its electricity is green, enhancing its environmental image and meeting international green standards.

Southern Weekly: Do these certificates have significant market value?

Lin Boqiang: The cash flow generated depends on the scope of green certificate coverage and how it connects 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 substantially, green certificate prices could increase as well, but this is a gradual process.

Phasing Out Coal Power?

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

Lin Boqiang: That’s a misconception. There is no explicit plan to shut down coal power. In fact, the rapid growth of wind and solar in recent years has depended heavily on coal power support. Without coal power backing, the technological progress and scale of wind and solar deployment wouldn’t be possible. From this perspective, coal power has contributed to clean development.

The current trend isn’t to eliminate coal power but to reduce its utilization hours—less generation means less carbon emissions. To ensure coal plants can operate reliably during critical times (like windless, sunless winter or summer peaks), they need to be compensated for standby capacity, which is reflected in recent capacity payment mechanisms.

Southern Weekly: How is this capacity mechanism working?

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

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 increase pressure on grid stability?

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

Currently, the “East Data West Computing” and “Compute and Power Coordination” initiatives aim to locate data centers in western regions rich in renewable energy, using local wind and solar directly, and increasing green power utilization through trading mechanisms. Policies like the Opinions on Deepening the “East Data West Computing” Project aim that by 2025, over 80% of new data center capacity in national hubs will use green power. Pilot projects in Gansu and Qingyang are exploring direct green power supply models to make energy more stable and direct.

Southern Weekly: “Document No. 4” emphasizes the “establishment of a nationwide unified electricity market,” but there are barriers between provinces. You mentioned “breaking down” these barriers.

Lin Boqiang: The document highlights key issues like integrating large and local grids. But deeper barriers exist between provinces. Different resource endowments, economic levels, and regional demands create conflicts—coal-producing provinces want better prices; 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 eliminated overnight. Different provinces have diverse resource profiles and interests. The best approach is to optimize resource allocation gradually—start with mutually beneficial transactions, establish clear rules, and let the market function. Building trust and understanding the benefits of cross-provincial trading takes time and wisdom.

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

Lin Boqiang: A nationwide unified market must be further promoted. 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 high transition costs in generation and grid sectors. If the carbon market and green certificates are also integrated, making fossil fuel use more costly and green power more profitable, the costs can be transmitted smoothly along the industry chain, leading to genuine energy savings and emission reductions. When the entire system operates more efficiently and sustainably, everyone benefits—cleaner air, safer energy supply, and more reasonable electricity prices. This process requires time and societal effort.

Researcher Zhu Jiangshui, Southern Weekly