China is on track to nearly double its data center capacity over the next five years, with 28 GW of new projects expected to come online by 2030, adding to the 32 GW already installed by the end of last year, according to a recent analysis by Rystad Energy.

Based on currently announced projects, which are likely to be followed by further additions, data center electricity consumption is projected to rise to 289 TWh by 2030. This is more than double last year's levels and represents approximately 2.3% of China's total electricity demand.

Data centers are also expected to become the fastest-growing source of power demand in the country, with an annual growth rate of 19% between 2025 and 2030, driven by the rapid expansion of artificial intelligence and high-performance computing.

Installed capacity is set to reach 40 GW by the end of this year, up from 32 GW at the end of 2025, reflecting the accelerating pace of construction. AI and advanced computing centers are playing an increasing role, accounting for 39% of current capacity, a figure expected to rise to 48% by 2030.

Unlike traditional data centers, these facilities consume significantly larger amounts of power, reshaping the scale and distribution of China's digital infrastructure. This shift was bolstered by the "East Data, West Computing" strategy launched in 2022, which established eight major computing hubs to alleviate resource pressure in the East. This has led to the emergence of clusters in regions like Ulanqab in Inner Mongolia, where companies such as Huawei and ByteDance have secured major projects.

China's data center sector is no longer a marginal part of the energy ecosystem; it has become a structural driver of demand. What distinguishes this expansion is its speed, fueled by AI, which is simultaneously pressuring infrastructure execution schedules and power procurement.

Operators are increasingly relying on a mix of energy sources, such as wind, solar, and battery storage, rather than waiting for government incentives, as securing reliable, low-emission electricity has become a commercial priority.

Rystad Energy expects China's total electricity demand to grow at a compound annual growth rate (CAGR) of 3.9% through 2030, compared to 6.5% during the 14th Five-Year Plan, during which consumption exceeded 10,000 TWh last year.

In contrast, industrial demand growth is expected to slow from 5.4% between 2021 and 2025 to 3% through 2030. Meanwhile, data centers continue to record robust growth, having risen at a CAGR of 38% over the past five years, and are expected to maintain 19% growth until the end of the decade, raising their share of electricity consumption to 2.3%.

China has also placed data center development among its strategic priorities in the 15th Five-Year Plan (2026-2030), focusing on efficiency and the integration of renewable energy. Power Usage Effectiveness (PUE) is a key metric, with the country aiming to reduce it to below 1.5 and reach advanced global levels by 2030.

Strict standards are already being imposed on new centers, which must not exceed a PUE of 1.25, or 1.2 in national computing hubs, compared to advanced global levels of 1.041.07 in top-tier facilities.

Chinese companies rely primarily on the national power grid to ensure operational continuity, supported by stable supplies of conventional energy and robust networks capable of absorbing growing demand.

At the same time, this surge represents an opportunity to enhance the use of renewable energy. The 2025 Green Data Center plan mandates that all new projects in national hubs obtain at least 80% of their needs from renewable sources.

Strategies utilized include purchasing Green Electricity Certificates (GECs), direct contracting with solar or wind projects, and on-site self-generation.

Advanced models are emerging in this context, such as the Zhongjin project in Ulanqab, which combines wind, solar, and battery storage, as well as China Mobiles "Chaidamu" project and Tencents cloud computing center, which relies on a mix of solar power and green energy trading.