China's AI Data Centres Face Green Power Integration Challenges

China's rapidly expanding artificial intelligence data centre sector is encountering obstacles in its push for increased renewable power usage, with experts highlighting difficulties in forecasting peak demand. Grid operators also express caution regarding added risks.

Credit: UNSPLASH

Reliable electricity for AI data centres has become a strategic priority, underscored in China's 2026 government work report released earlier this year. This report pledged greater integration between computing infrastructure, and power supply networks.

Authorities aim for renewables to supply four-fifths of the sector's total power consumption by 2030, a sharp rise from just 11% in 2023.

Director Pei Shanpeng of State Power Investment Corp., a Chinese power firm, projects data centre power demand will increase by 300 billion to 500 billion kilowatt-hours from 2026 to 2030. This accounts for 18% of the country's total electricity demand growth during that period.

Despite the surge in demand, the data centre sector is less suited for green power providers compared with traditional energy-intensive industries like aluminium smelting. This is primarily due to the difficulty in predicting its peak demand.

Pei noted that data centres currently lack flexibility in managing power demand. He explained that operators aim to use Graphics Processing Units as quickly, and intensively as possible due to their high cost, making load adjustments difficult.

Pei added that the drive to expand green power use in data centres prioritises cutting emissions over reducing electricity costs.

Experts also predict resistance from grid operators to the widespread adoption of direct green-power links to data centres. Grid operators worry such networks would see electricity sales decline and make it harder to recover hefty investments in transmission and distribution infrastructure if demand slows or falls.

The rapid rollout of data centres, aimed at supporting AI workloads, has already stressed the power sector in some regions. This has increased average, and peak grid loads, compelling operators to balance rising demand with reliability risks.

Wang Zelin, deputy director at State Grid Jibei Electric Power Research Institute, stated that adjusting 15% of power consumption loads would considerably lessen capacity expansion pressure on the grid over the coming three to five years.

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* China's AI data centres are facing hurdles in integrating renewable power.

* Challenges include unpredictable peak demand, and caution from grid operators.

* The goal is for renewables to supply 80% of data centre power by 2030, up from 11% in 2023.

Source: Reuters