China's push for green power use in AI projects faces hurdles, experts say

China's drive to ramp up renewable power for its fast-expanding AI data centre sector is running into hurdles, as industry experts warn that forecasting peak demand remains difficult and grid operators are wary of taking on added risk. Ensuring reliable electricity for AI-focused data centres has become a strategic priority, underscored in China's 2026 government work report released earlier this year, which pledged stronger integration between computing infrastructure and power supply networks.

Experts highlight the complexity of aligning renewable energy supply with the fluctuating power consumption patterns of AI data centres. The challenge is compounded by the need to balance energy efficiency with the reliability of power delivery, particularly as the sector continues to grow rapidly. Grid operators are cautious about the risks associated with integrating large-scale renewable energy sources into existing infrastructure.

According to projections, power demand from China's data centres is expected to rise by 300 billion to 500 billion kilowatt-hours between 2026 and 2030, accounting for 18% of total electricity demand growth over the period. This surge in demand has prompted authorities to set ambitious targets, aiming for renewables to supply four-fifths of the sector's total power consumption by 2030, up from just 11% in 2023.

Industry experts suggest that adjusting 15% of power consumption loads could significantly reduce the pressure on the grid over the next three to five years. However, achieving this level of flexibility requires advanced energy management systems and close collaboration between data centre operators and grid providers. The challenge lies in ensuring that renewable energy sources can meet the sector's growing demand without compromising grid stability.

The hurdles in implementing green power strategies for AI projects could lead to increased costs, delays in infrastructure development, and potential vendor lock-in as companies rely on specific energy solutions. Market reactions may also be influenced by the pace of progress, with stakeholders closely monitoring how effectively China can balance its renewable energy goals with the practical demands of its expanding AI sector.