The designation of National Demonstration Project carries immense strategic weight in China's energy landscape, offering project owners substantial benefits: direct financial support, streamlined policy approvals, priority in government procurement, access to advanced technologies and talent, and long-term institutional backing. These projects reflect national priorities and form a blueprint for accelerating the low-carbon transition that signal where China's energy stakeholders are placing their bets.
Project Categories
- Carbon Source Reduction (50 Projects)
Focused on scaling renewable energy generation, grid modernization, storage systems, and green hydrogen production.
- Process Carbon Reduction (44 Projects)
Targets industrial decarbonization, sustainable transportation, and smart energy systems to optimize efficiency.
- End-Use Carbon Sequestration (7 Projects)
Explores large-scale carbon capture, utilization, and storage (CCUS), including converting captured CO₂ into synthetic fuels.
Compared to Batch 1 (47 projects total in 2023), Batch 2 reflects a dramatic expansion in both scope and scale. Let's take a look at some highlights of the new initiatives.
Notable Projects in Batch 2
Deep-Water Deployment of Offshore Wind Platforms
A 700 MW offshore wind farm off Fujian's coast stands out as a “large capacity deep water” pioneer. Utilizing 39 turbines (18 MW each) in waters over 40 meters deep, it aims for a 49% capacity factor, far exceeding typical offshore wind performance. With coastal provinces constrained by land scarcity, such projects could unlock China's offshore potential, positioning 2025 as a breakout year for the sector.
2. Geothermal Heating
A pilot in Xianyang, Shaanxi, will drill 2–3 km into the Earth's crust to deploy a district heating system powered by geothermal energy. Once operational, it will heat 1.1 million square meters of buildings (10,000–20,000 homes) and displace 20,000 tonnes of coal annually. This model, inspired by projects like France's Rittershoffen, could revolutionize heating in northern China, where coal-fired combined heat and power (CHP) plants dominate.
3. Captive Coal Replacement for Heavy Industry
A hybrid renewable facility in Inner Mongolia aims to replace a coal-fired captive power plant at a Chinalco aluminum smelter. With 1 GW of wind, 200 MW of solar, and 135 MW/540 MWh of storage, the project could offset ~3,500 GWh of coal-generated electricity yearly. Success here could chart a path for decarbonizing energy-intensive industries reliant on captive coal. This addresses a critical hurdle for China's post-2030 emissions trajectory.
4. Expanding Green Hydrogen Infrastructure
Batch 2 includes 10 green hydrogen projects targeting 780,000 tonnes of annual production. The largest, in Inner Mongolia's Hinggan League, pairs a 2 GW Goldwind farm with 500,000 tonnes/year of green hydrogen-derived ammonia and methanol. As China eyes hydrogen for steelmaking, shipping, and aviation, these pilots aim to solidify its position in the global hydrogen race.
5. Compressed Air Storage
Six projects test compressed air energy storage (CAES), positioned as a mid-duration solution between batteries and pumped hydro. The Qinghai pilot (60 MW/10 hours) highlights long-duration potential, while others (300–350 MW/4+ hours) target grid flexibility. As power markets mature, CAES could complement renewables in balancing supply and demand.
6. Virtual Power Plants (VPPs)
These projects integrate industrial demand response, EV charging, and storage into grid-responsive hubs. While current pilots are small-scale (e.g., industrial parks), their success hinges on evolving power markets that incentivize real-time load management. With EV adoption surging, VPPs could soon play a central role in grid stability.
Decarbonizing Hard-to-Abate Sectors
The Process Carbon Reduction category showcases China's most audacious bets for maintaining industrial competitiveness while cutting emissions:
- Baosteel's Zhanjiang facility replaces coking coal with hydrogen in iron reduction, slashing emissions from ~2,000 kg to 240 kg CO₂ per tonne of steel. Though costly today, such projects are critical for a sector responsible for ~15% of China's emissions.
- A Yunnan pilot replaces the toxic Siemens process with physical purification, cutting energy use by 5,100 GWh/year and water use by 6.2 million m³. If scalable, this could green the solar supply chain.
- Shanghai's underwater data center, powered by offshore wind and cooled by seawater, reduces land use by 90% and freshwater demand—a novel template for energy-hungry tech infrastructure.
- A Zhejiang facility converts 500,000 tonnes/year of waste oils into 400,000 tonnes of biofuels, including sustainable aviation fuel (SAF). Such projects align with global efforts to decarbonize aviation.
- Capturing 600,000 tonnes/year of CO₂ in Xinjiang, this project produces green ammonia and explores oxamide, a low-runoff fertilizer alternative. While costs remain high, it highlights circular economy potential.
China's National Demonstration Projects represent a testing ground for technologies that could reshape global energy systems. From green hydrogen to carbon-neutral steel, these initiatives follow a strategy of scaling first, and optimizing later. Batch 2 underscores China's commitment to making a transition off fossil fuels, and offers a roadmap for the energy transition.
sources:
https://yyglxxbsgw.ndrc.gov.cn/htmls/article/article.html?articleId=2c97d16c-9324f814-0195-f4109999-002b#iframeHeight=808
https://www.ndrc.gov.cn/xxgk/zcfb/tz/202404/P020240416342109364520.pdf
https://yyglxxbs.ndrc.gov.cn/file-submission/20250402115327890451.pdf
