- China is integrating the development of power-hungry data centres into its national energy strategy.
- The move underscores China’s ambitions to dominate AI, a sector that is rapidly becoming a significant driver of economic growth but could pile pressure on electricity supplies.
China is integrating the development of power-hungry data centres into its national energy strategy. This is to fuel its growing AI sector and computing prowess.
Under a new action plan released on Wednesday, June 4, Beijing would coordinate data centre planning with energy infrastructure in areas and regions rich in new energy resources, to meet the surging electricity demands of high-performance computing facilities.
“We will focus on national hub nodes and resource-abundant non-hub regions such as Qinghai, Xinjiang and Heilongjiang, coordinating existing and new data centre demand for green electricity with local renewable energy capacity,” China’s National Energy Administration said.
According to the plan, innovative technologies would be used to forecast consumption and renewable generation in real time, easing pressure on electricity grids during peak hours. This would enable data centres to use energy more flexibly.
On the same day, the Ministry of Industry and Information Technology discussed efforts to advance artificial intelligence and hi-tech manufacturing. “While nurturing major AI firms, we also need to support smaller, specialised companies,” the ministry said.
The move underscores China’s ambitions to dominate AI, a sector that is rapidly becoming a significant driver of economic growth but could pile pressure on electricity supplies. Power consumption from data centres was expected to rise sharply as more applications and users emerge, especially following the launch of China’s home-grown AI model, DeepSeek.
Power demand for AI computing could grow 43 per cent in 2025 compared to the previous year, according to a February report from the International Data Corporation (IDC) and Inspur Information.
Data centres were projected to account for 2.4 per cent of China’s total electricity consumption – with the share exceeding 20 per cent in certain cities and regions, according to estimates from the Beijing Institute of Technology, cited by the state-run People’s Daily.
That would place China on a similar trajectory to the US, where data centres already consumed around 3 to 4 per cent of national electricity demand in 2024, a figure expected to grow to 11 to 12 per cent in 2030, according to a McKinsey analysis last year.
Under the new action plan, China planned to increase the share of clean energy used to power data centres by encouraging local wind and solar power through bundled transactions and on-site usage.
The government would recycle excess heat from data centres and integrate solar thermal energy with wind and photovoltaic sources to stabilise supplies.
In addition, authorities would roll out pilot projects to test new power system models designed to improve grid reliability.
In the US, data centres could drive nearly half of all electricity demand growth through 2030, outpacing manufacturing across all energy-intensive sectors combined, according to the International Energy Agency(IEA).
Globally, electricity used by data centres was expected to double by 2030 – reaching levels comparable to Japan’s total national power consumption today, the IEA said in April.