MNI INTERVIEW: China AI Demand To Drive Electricity Growth

China’s primary energy consumption is expected to peak around 2030 at about 6.8-7.1 billion tonnes of standard coal equivalent, up from 5.96 billion tonnes in 2024, with the share of electricity in total energy use rising from 19.8% to 25%, driven partly by AI-related demand, a government energy policy advisor told MNI.

Electricity demand from AI – including data centres and computing clusters – will represent the fastest-growing component of power use during the 15th Five-Year Plan (2026–2030), said Shanghai-based Liao Na, CEO of GL Consulting and vice president of Mysteel OilChem. 

Citing China Electricity Council estimates, she said AI-related power consumption could account for 8-10% of incremental electricity-demand growth between 2025 and 2030, reaching around 400 billion kWh, or 3-4% of national electricity use by 2030.

By comparison, a recent report by the U.S. Electric Power Research Institute estimated that U.S. AI power consumption could reach 438 billion kWh by the end of the decade. 

Demand will be concentrated in more developed eastern provinces such as Zhejiang, Jiangsu and Guangdong, Liao said, adding that authorities are accelerating the build-out of renewable capacity to meet AI-driven needs. By September, China’s installed wind and solar PV capacity had reached 1.7 terawatts, or 46% of national capacity, and is expected to hit 3TW by 2030, about 75% of the total. Liao noted that this scale exceeds the combined energy capacity – of all types – in the U.S., EU and India.

PETROCHEMICAL TRANSITION

China’s focus on high-end manufacturing and industrial upgrading, reflected in the new 15th Five-Year Plan recommendations, is reshaping petrochemical demand, Liao said. Growth in demand for ethylene – a bulk chemical used across textiles, construction and packaging – is expected to slow to 2-3% annually between 2025 and 2030, sharply below the double-digit rates of the past decade.

Petrochemical demand growth will increasingly shift from bulk chemicals to advanced materials for sectors such as electric vehicles, electronics, renewable energy and medical devices, she said.

Adjustments in domestic oil trade flows will also be required. Under the previous growth model, gasoline and diesel dominated crude consumption, with Shandong’s independent “teapot” refiners serving as key hubs. But with gasoline and diesel demand projected to fall by 30% and 35% from 2025 levels by 2030, trade flows will gradually shift toward a more decentralised, regionally driven pattern, Liao said. 

She added that China is now seeing the emergence of integrated industrial clusters that align production, innovation and supply chains around emerging industries including new energy vehicles, batteries and green power.