China’s Renewable and Nuclear Build-Out: What It Means for Oil and Gas

How fast is China's renewable energy capacity growing?

China renewable energy capacity grew at a record pace in 2025. According to National Energy Administration (NEA) data reported by Mercom, China added 311 gigawatts (GW) of solar and 119 GW of wind last year. Cumulative solar capacity reached about 1,200 GW and wind about 640 GW, together overtaking thermal capacity of about 1,500 GW ^[1]. The think tank Ember estimates that China accounted for 58% of global solar installations in 2025 and 72% of wind installations ^[2].

The pace slowed in 2026 from that very high base. The Centre for Research on Energy and Clean Air (CREA) reports that China installed 97.2 GW of solar in the first eight months of the year, down 58% and the lowest for that period since 2022. Wind additions were 53.3 GW, down 8% but still above the level of any year before 2025 ^[3]. Even so, NEA data showed solar capacity of 1.286 billion kilowatts at the end of July, slightly above coal at 1.285 billion kilowatts, the first time solar had overtaken coal ^[4].

Forecasters have trimmed their expectations for the year. In mid-2026, the data and analytics company Kpler cut its 2026 forecasts to 150 GW for solar and 90 GW for wind. It still expects combined wind and solar capacity to reach 1,927 GW by the end of 2026, and nearly 2,900 GW by 2030 ^[5].

How big is China's nuclear power expansion?

China's nuclear programme is expanding steadily. The World Nuclear Association (WNA) lists 65 operable reactors with 65,085 megawatts (MWe) of capacity and 38 under construction with 39,755 MWe, in a page updated on 23 October 2026 ^[6]. According to the WNA, the 15th Five-Year Plan (2026–2030), approved in March 2026, targets 110 gigawatts (GWe) of nuclear capacity by 2030 ^[6]. Nuclear generated 451 terawatt-hours (TWh) in 2024, or 4% of China's electricity ^[6].

New reactors are starting up. CREA counted 4.8 GW of nuclear capacity added in January–August 2026, against none a year earlier, and nuclear generation rose 22.4% year on year in September ^[3]. Carbon Brief's analysis notes that eight new reactors were approved in July. Five reactors with 4.5 GW of capacity are expected to enter commercial operation this year, including the Linglong One small modular reactor. The government has approved 10 new reactor projects every year since 2022 ^[7].

Can the grid and storage keep up?

Integrating this capacity is now the main constraint. CREA lead analyst Lauri Myllyvirta writes that curtailment, where available wind and solar output is wasted, "has emerged as the key obstacle" to both faster capacity growth and full use of existing plants ^[7]. New sectoral plans set a national curtailment target of "around" 10%, with provincial limits of 5%, 10% or 15% ^[7].

Grid spending is rising in response. State Grid plans to invest CNY 4 trillion in 2026–2030, a 40% increase on the previous five-year plan, according to Enerdata citing Xinhua ^[8]. It aims to raise cross-regional transmission capacity by more than 30% from 2025 levels using ultra-high-voltage (UHV) lines ^[8]. State Grid's fixed-asset investment exceeded RMB 310 billion in the first half of 2026, up 12.6%, with 15 UHV projects and 37 pumped-storage plants under accelerated construction ^[9].

Battery storage is growing more slowly. China added 17 GW in the first half of 2026, down from 23 GW a year earlier, taking the total to 153 GW ^[7].

What role does coal still play?

Coal still provided 54% of China's electricity in 2025, but its share is falling ^[2]. Last year China's fossil generation fell by 0.9%, the first year without an increase since 2015. Coal generation fell by 1.2%, even though electricity demand grew by 5% ^[2]. Wind and solar supplied 22% of generation, up from 18% in 2024 ^[2].

At the same time, coal capacity keeps growing. China added 30 GW of coal-power capacity in the first half of 2026, the most for any first half since 2016, and had 204 GW under construction ^[7]. CREA reports a record 58.7 GW of thermal capacity added in the first eight months of 2026 ^[3]. Coal generation rose 2.4% in the second quarter, which Carbon Brief attributes mainly to wasted wind and solar output ^[7]. It then fell 1.5% year on year in September, the third consecutive monthly decline ^[3].

How is electrification affecting China's oil demand?

Transport is where the transition most directly affects oil. The International Energy Agency's (IEA) Global EV Outlook 2026, as reported by the Nigerian newspaper THISDAY, found that electric vehicles (EVs) made up nearly 55% of new cars sold in China in 2025. It expects them to exceed 90% of car sales by 2035 ^[10]. The IEA has separately estimated that EVs displaced about 1 million barrels per day (b/d) of Chinese oil demand in 2025, rising to about 2.7 million b/d by 2030 under current policies ^[11].

High prices in 2026 accelerated the shift. Carbon Brief's analysis found that China's oil consumption fell about 9% in the second quarter and transport oil use fell 16% ^[7]. EVs avoided an estimated 36 million tonnes of oil equivalent (Mtoe) in the first half. Electric heavy-truck sales rose about 77% in the second quarter, and electric trucks took more than 45% of new sales ^[7]. If growth continues at the same rates, avoided oil consumption will reach 80 million tonnes, about equal to Mexico's consumption ^[7]. The analysis concludes that "this trend is unlikely to be reversed" ^[7].

Sinopec's research institute expects petrol demand to fall 8.7% in 2026 to 149 million tonnes and diesel 11.4% to 164 million tonnes ^[11]. Policy points the same way: China aims for electricity to supply 35% of final energy use by 2030, up from 30% in 2025, and for EVs to make up 30% of the vehicle fleet, up from 12% ^[7]. In June 2025, before the Gulf crisis, the IEA expected China's oil demand to peak in 2027 ^[12].

What does this mean for oil and LNG imports?

China's crude imports fell 15.3% year on year in the first nine months of 2026, according to CREA ^[3]. Not all of this is structural. Carbon Brief estimates that about 60% of the 32% cut in second-quarter oil imports was covered by drawing on stockpiles rather than by lower consumption ^[7]. Once inventories are rebuilt, import demand could partly recover. However, the EV fleet keeps growing, which points to slower long-term growth in China's crude purchases.

The gas picture is mixed. Before the crisis, Kpler expected domestic gas output to rise about 6% to 278.5 billion cubic metres (bcm) in 2026, limiting LNG demand to 73.9 million tonnes (Mt) ^[13]. The IEA reports that China's LNG imports fell 12% year on year between March and June, partly because domestic production was stronger. It also notes that high LNG prices pushed Asian buyers to switch some gas use to coal ^[14]. Total gas imports were 3.9% lower in January–September ^[3]. By mid-2026 Kpler's forecast for China's 2026 LNG demand stood at 63.7 Mt, after a further small cut linked to wind and hydropower conditions ^[5].

For global markets, the reported data suggest three effects:

• Crude: EVs and electric trucks are reducing China's road fuel use, and Sinopec's institute expects petrol and diesel demand to fall in 2026 ^[7,11].
• LNG: growing renewable output, rising domestic gas production and coal backup leave China's LNG imports sensitive to price ^[5,13,14].
• Refining: Sinopec's institute estimates that 80–100 million tonnes a year of refining capacity could leave the market by the end of 2030 ^[11].

What to watch

• Installations: whether solar and wind additions recover in late 2026, and how curtailment rules are applied ^[3,7].
• Nuclear start-ups: the five reactors due this year and the next round of approvals ^[6,7].
• Coal: new coal capacity against falling coal generation ^[3,7].
• Oil demand: whether the 2026 drop in road fuel use holds once prices ease ^[7,11].
• LNG: Chinese spot buying as prices change and new LNG supply arrives ^[5,14].

Alupetra follows China's energy transition and its effect on oil and LNG trade from its offices in Istanbul, London and Dubai.