A World in Turmoil: The Global Energy "Second Solution" Is Taking Shape

Ask AI · How can China’s energy system demonstrate resilience amid a global crisis?

21st Century Business Herald reporters Fe Xinyi and Cao Enhui

In March 2026, in the Strait of Hormuz, where super-large oil tankers once moved back and forth in constant streams, they had no choice but to cast off and stand by. Behind the more than 90% drop in traffic volume, a new round of global oil crisis is brewing.

A report urgently released that month by the International Energy Agency (IEA) shows that the global oil market is facing the most severe supply bottleneck in history. The Gulf oil-producing countries have collectively cut production, pushing Brent crude prices to a new high in nearly two years.

Institutional forecasts say that if the crisis continues for half a year, its impact would be comparable to the first oil crisis in 1973: at that time, the Fourth Middle East War broke out. Arab oil-producing countries imposed an oil embargo on the United States and other countries that supported Israel. Oil prices surged from $2.7 per barrel to $13 per barrel within just a few months, which directly pushed the United States into the worst postwar stagflation, and global stock markets also plunged in response.

But unlike half a century ago—when Western economies fell into energy panic again due to geopolitical turmoil in the Middle East—China’s energy supply chain has shown rare resilience.

At present, the energy solutions of major global economies, including China, are primarily fossil-energy based. After decades of building an energy security assurance system, China has already deeply participated in the reshaping of the global energy order—an emerging “second solution” for global energy centered on China is taking shape.

The resilience of China’s energy supply comes from a “three-in-one” energy security assurance system: oil and gas pipeline infrastructure as the “skeleton,” power equipment manufacturing as the “muscle,” and the energy supply chain as the “nerves.”

Data released by the National Energy Administration shows that in 2025, China’s total production of primary energy for the first time exceeded 5 billion tons, reaching 5.13 billion tons of standard coal. Of this, crude oil output was 216 million tons, up 1.5% year on year; natural gas output was 262.06 billion cubic meters, increasing by more than 10 billion cubic meters for nine consecutive years; the total length of oil and gas pipelines exceeded 200,000 kilometers; gas storage capacity was 54 billion cubic meters; and the annual first-level pipeline transmission capacity for natural gas exceeded 400 billion cubic meters per year.

Especially, oil and gas pipeline facilities have become key to responding to extreme disruptions. For example, in January 2026, when multiple regions in our country faced severe cold wave weather and natural gas supply assurance entered a critical phase, the national trunk natural gas pipeline network managed by the National Pipeline Network Group delivered 1.1 billion cubic meters of gas per day, setting a new historical record for daily supply volume.

Independently controllable power equipment manufacturing is another major core support. Currently, China’s global competitiveness in the power and energy equipment manufacturing industry has already formed advantages in multiple areas. China’s global market share of power grid equipment is about 35%-40%, making it the world’s largest production and export base. Among them, the global market share of ultra-high-voltage equipment exceeds 70%, the localization rate of core equipment exceeds 95%, and transformer exports account for 35% of the global total. This means that in long-distance, large-capacity power transmission, China holds absolute say.

In the fields of wind power, solar PV, and nuclear power equipment, Chinese manufacturing shines even more: among the world’s top 10 wind turbine OEMs, Chinese companies hold 6 spots; China’s photovoltaic industry has the largest global installed capacity of power stations, contributing more than 80% of global manufacturing capacity; and China’s nuclear power installed capacity ranks first globally, achieving 100% domestication of key nuclear power main equipment.

A highly resilient energy supply chain “connects the nerves” that enable the stable operation of China’s energy system. In particular, cross-regional energy mutual assistance makes energy supply and assurance more efficient. By the end of the 14th Five-Year Plan, China had built 14 direct current (DC) transmission channels for power export, including 10 ultra-high-voltage DC lines, with an export scale of 95.31 million kilowatts. The latest data shows that in 2025, the Northwest Power Grid’s cross-regional power export volume reached 411 billion kWh, surpassing 400 billion kWh for the first time.

In a turbulent global energy market, China’s energy import structure is also undergoing profound changes, shifting toward “global deployment with land and sea serving together.”

Customs data from China confirms this. In 2025, China’s total crude oil import volume reached 578 million tons, sourced from 49 countries. Among them, the share of imports from the Middle East fell to 42.3%, down 10 percentage points from ten years ago.

The diversification of natural gas imports is even more evident. According to data from the National Energy Administration, in 2025, China’s natural gas import sources covered more than 20 countries, with an import volume of 176.46 billion cubic meters, down 2.8% year on year. LNG (liquefied natural gas) imports fell 10.6% year on year. Natural gas external dependency stood at 40%, the lowest level during the 14th Five-Year Plan.

It is worth noting that, backed by the China-Russia East Line natural gas pipeline, the China-Myanmar oil and gas pipeline, and the Central Asia natural gas pipeline, China’s share of pipeline gas imports last year rose to about 49%. This “land and sea serving together” structure allows China to obtain stable supply through onshore pipelines even when traditional choke points such as the Strait of Malacca and the Strait of Hormuz are blocked.

It cannot be denied that building cross-border energy corridors is the physical support for diversified deployment. Taking the China-Russia East Line natural gas pipeline as an example: last year, the pipeline’s gas transmission volume reached 38 billion cubic meters, accounting for 47% of pipeline gas imports. This gas transmission volume is enough to meet the annual residential gas demand of the three northeastern provinces.

While ensuring energy security, China is also accelerating the development of a new energy system and gradually becoming a leader in the global energy transition.

In 2025, China’s total electricity consumption across the whole society exceeded 10 trillion kWh for the first time, setting a global record. Horizontally, this figure is more than twice the annual electricity consumption of the United States and higher than the combined annual electricity consumption of the European Union, Russia, India, and Japan.

However, within this enormous electricity demand, nearly 4 out of every 10 kWh comes from renewable energy. According to data from the National Energy Administration, in 2025, the nation’s renewable energy power generation reached 3.99 trillion kWh, up 15% year on year. It accounted for about 38% of total power generation, exceeding the combined electricity consumption of the tertiary industry (199.42 billion kWh) and urban and rural residents’ living electricity (158.8 billion kWh).

Behind the above proportion is China’s long-term investment in renewable energy. In 2025, China’s installed capacity of renewable energy once again hit new highs, with a share exceeding two-thirds. Among them, new wind and solar power installed capacity added more than 430 million kW; the cumulative installed capacity share is close to half, and it has historically surpassed coal-fired power for the first time. And by the end of 2025, China’s combined installed capacity for wind and solar power was 1.84 billion kW, accounting for 47%.

Currently, a wave of green electricity transformation is sweeping across the globe. Taking the European Union as an example: a report released by Eurostat indicates that in 2025, the share of renewable energy power generation in the EU’s total electricity generation reached 47.3%, up slightly from 2024. But it should be noted that the EU’s growth in green power relies on wind power and solar PV. As the penetration rate of wind and solar rises rapidly, the power grid finds it difficult to fully absorb their fluctuating output, and curtailment of wind and solar power has become more severe.

By contrast, China’s green power growth is a comprehensive increase across wind, solar, hydropower, and biomass power, with a more balanced structure. Moreover, during the 15th Five-Year Plan period, under the national strategy of “building an energy-strong nation,” China has entered a critical period to accelerate the construction of a new energy system.

In addition, the reporters of 21st Century Business Herald noted that this year’s government work report proposes focusing on building a new power system, accelerating smart grid construction, developing new energy storage, and expanding the application of green electricity.

Song Yubo, Chairman of the China Energy Research Society, said at the recently held 11th China Energy Development and Innovation Conference that, judging by development laws, after per capita GDP crosses $10,000, energy consumption will enter a longer period of rigid growth, and the building of a strong country must be supported by a powerful energy system. From the perspective of real challenges, China must both ensure the energy demand needed for sustained, healthy economic and social development and steadily achieve its “dual carbon” goals. Under the constraints of these two fronts, it is crucial to build a solid barrier for energy security. Energy is not only the “driving blood” of development, but also the country’s “lifeline for security.”

With low-carbon transformation on the power generation side in full swing, electrification of terminal consumption is also a key step in reducing dependence on fossil fuels.

A set of data clearly shows the “China footprint”: according to data released by the China Association of Automobile Manufacturers, in 2025, China’s new energy vehicle production and sales completed 16.626 million units and 16.49 million units, respectively, remaining the world’s top for the 11th consecutive year.

Meanwhile, export data further reflects China’s global competitiveness in new energy vehicles. In 2025, China exported 2.615 million new energy vehicles, up 103.7% year on year, and remained the global No. 1 for three consecutive years.

According to a report by People’s Daily Overseas Network that cites foreign media, China’s global competitiveness in electric vehicles continues to improve thanks to rapid R&D cycles and advanced design concepts, making it a benchmark in the industry. “China has strongly promoted the development of the electric vehicle industry, which effectively shortens the R&D cycle for automakers; often, it takes only one or two years to roll out a brand-new model. In addition, patents in China’s electric vehicle industry are increasing continuously, and its technological level has improved significantly.”

What should not be overlooked is that the boom in China’s new energy vehicle industry is inseparable from the rise of the power battery industry. According to data recently released by the South Korea market analysis institution SNE Research, in 2025 the global power battery market size first surpassed the 1100 GWh threshold. Among them, Chinese manufacturers hold an absolute leading position in the global automotive power battery market; their combined market share in 2025 further increased to 70.4%, with CATL and BYD ranking first and second.

In fact, the real value of the electrification “revolution” is better reflected in the substitution at the terminal level: by 2025, China’s NEV vehicle stock exceeded 43 million. Each year it can save about 85 million tons of crude oil, equivalent to reducing roughly 15% of overseas oil dependence.

It should be noted that the large scale of NEV production and sales also means substantial consumption of power batteries. In response, China has formed a power battery recycling closed loop of “resources-production-consumption-recycling.” Data released by the Ministry of Industry and Information Technology shows that in 2025, China’s comprehensive utilization of scrapped NEV power batteries exceeded 400,000 tons, up 32.9% year on year. The recycling rates of metals such as lithium, cobalt, and nickel at backbone enterprises are at internationally advanced levels.

In its report “World Energy Outlook 2025,” the International Energy Agency (IEA) believes that the global energy system is undergoing the deepest structural adjustment in 20 years. Geopolitical tensions, frequent extreme climate events, and accelerated technological change together have led to a rebalancing of the weights of energy security and energy transition.

The report also specifically proposes: “China’s energy consumption structure is stabilizing. Its role is shifting from a demand-centered one to a technology- and capital-output-centered one.”

After decades of exploration and efforts, China is forming a “second solution” for global energy. Energy security and energy transition advance together, without relying on international geopolitical changes.