Computing sector to play crucial role in power demand

China's rapidly expanding computing infrastructure is emerging as a significant new source of power demand, challenging the nation's grid and accelerating the need for flexible energy regulation capabilities, industry experts said.

While China pushes forward with its ambitious renewable energy build-out, the surge in demand from data centers, AI, and other computing-intensive sectors is creating a challenge for grid operators, requiring solutions beyond traditional power sources, said Zhao Yong, president of the Energy Research Institute under China Huaneng Group Co Ltd.

The escalating power consumption of the computing sector is becoming a major factor in China's overall energy picture. Among high energy-consuming industries, computing's share of national electricity demand is projected to rise sharply, he said during a summit held by industry consultancy BloombergNEF in Beijing recently.

"Electricity demand from computing power is expected to continue soaring all through 2035. This figure represents a substantial portion of China's overall electricity consumption," he said.

"The need to reconcile the growth of energy-intensive computing with China's green energy transition is becoming increasingly pressing."

Zhao emphasized the importance of coordinated development between computing power and electricity supply, with energy storage playing a vital role in ensuring grid stability and enabling the deeper integration of renewable energy to meet this burgeoning demand.

The rapid growth and widespread adoption of new infrastructure technologies like 5G, big data, cloud computing, AI, and the industrial internet have led to a substantial surge in electricity consumption within these industries, said the China Electricity Council.

Consultancy McKinsey & Company said the growth of data centers and the adoption of AI rely heavily on the availability of electric power. As a result, opportunities for investors in power infrastructure and adjacent sectors are quickly emerging.

Zhao said one key technology gaining prominence is new-type energy storage, including compressed air energy storage. These advanced storage solutions are seen as crucial for providing the flexible grid regulation needed to balance the increasing variability of renewable energy sources and the surging demand from the digital economy.

Energy storage capacity has grown exponentially during China's 14th Five-Year Plan (2021-25) period, he said.

Chinese authorities unveiled several measures in February to promote the new-type energy storage manufacturing sector, as part of efforts to accelerate the development of emerging industries and the country's modern industrial system.

According to an action plan jointly issued by the Ministry of Industry and Information Technology and seven other government departments, by 2027, the sector is expected to demonstrate international competitive advantages across the entire manufacturing chain, with a greater number of leading enterprises, marked improvements in industrial innovation capabilities, and overall competitiveness.

China will launch initiatives to boost technology innovation in the new-type energy storage sector, including measures to speed up the upgrading of mature technologies such as lithium batteries and support disruptive technological innovations, it said.