From Coal to Green Energy, Shanxi’s Transformation Is Stunning

Shanxi, a region in northern China once associated with coal mining and known as the “Coal Province,” is now a leader in China’s transition to renewable energy, having made significant progress in developing solar energy to power the country’s green transformation.

Analysts say the region enjoys unique advantages over other provinces in terms of solar energy development, with ample solar energy resources and large swaths of reclaimed land, including former coal mining areas, much of which have been earmarked for large-scale solar farms.

The province has long been famous for its rich coal deposits and its energy mix is ​​dominated by black gold, but it also has abundant wind and solar energy resources, making the province’s resources ripe for the development of renewable energy sources, said Zhu Yicong, vice president of renewable energy and energy research at global consulting firm Rystad Energy.

“Over the past decade, Shanxi’s share of wind and solar power in total installed capacity has increased from 6 percent in 2013 to more than 38 percent in 2023. We expect this number to rise to 52 percent by 2026,” she said.

Data released by the consulting firm shows that Shanxi will launch 8 gigawatts of new solar capacity in 2023. To achieve its goals, the consulting firm expects the province to launch 9 GW of solar capacity this year and another 11 GW next year.

According to the Shanxi government energy administration, as of the end of June 2024, the province’s installed new and clean energy generating capacity reached 64.49 million kilowatts, accounting for 47.22% of the total capacity.

Aiming to achieve a total output value of the photovoltaic industry of more than 100 billion yuan ($13.97 billion) by 2025, the province is accelerating the development of an industrial ecosystem covering silicon materials, silicon wafers, cells and modules, aiming to move Shanxi’s photovoltaic industry upstream in the value chain.

The 14th Five-Year Plan (2021-2025) for the Development of Renewable Energy in Shanxi Province sets a target of a combined wind power capacity of 30 GW and 50 GW of photovoltaic capacity by the end of 2025, strengthening the province’s determination to move towards a cleaner energy mix.

Part of the province’s well-developed energy infrastructure, initially built to support the coal industry, has also been adapted and expanded to integrate solar power. This existing network facilitates the distribution and transmission of solar power, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

He added that Shanxi’s well-established industrial base, which also includes energy-intensive industries, provides a ready market for locally generated solar energy.

According to Lin, provincial governments have shown strong support for renewable energy development, offering incentives in the form of subsidies, tax breaks and simplified permits to encourage investment in solar projects.

As a province historically dependent on coal, Shanxi has a strong incentive to diversify its economy. The development of solar energy offers an opportunity to move to more sustainable and less polluting energy sources, creating new economic opportunities, he said.

He believes that by leveraging these advantages, Shanxi Province is well-positioned to take a leadership position in solar energy development, contributing to the region’s economic transformation and supporting China’s broader renewable energy goals.

Jinneng Clean Energy Technology Co. Ltd, a leading player in the renewable energy sector, is pioneering this transformation.

“Energy is a major battleground in our pursuit of carbon neutrality, and the company is stepping up its technology and research efforts to improve the photoelectric conversion efficiency of our products,” said Liao Jicheng, deputy general manager of Jinneng Clean Energy Technology Ltd, Jinergy.

Faced with fierce competition in the industry, Jinergy is leveraging its global channels to expand its reach through its extensive international sales network and working with overseas customers on project development at early stages and providing them with technical support, he added.

Liao said exports accounted for 50 percent of Jinergy’s total sales. While that figure has recently fallen to about 10 to 15 percent due to the expanding domestic market, overseas sales continue to grow, particularly in Southeast Asia and India.

The company is currently also actively developing in the Middle East and Africa markets, where demand for energy is high.

The global PV market remains strong despite the competitive environment, Liao said, as the energy transition is an irreversible trend and the growth potential in the global PV industry remains huge.

“Forecasts indicate that solar energy could account for 59 percent of global energy by 2050. The fundamentals of PV development have not changed and we remain optimistic about the future,” Liao said.

He added that as Shanxi transitions from coal to solar power, the province is setting an example for other regions in China, demonstrating its commitment to a sustainable and greener future.

According to Lin, despite significant progress in developing solar energy, the province also faces numerous challenges in transitioning from coal to renewable energy, from economic transformation to technology and infrastructure development.

Switching to solar energy requires significant investment and restructuring of the local economy, which can be a slow and complex process, he added.

On the other hand, developing a comprehensive photovoltaic industry requires advanced technology and infrastructure, and integrating solar energy into the existing power grid also poses technical challenges, especially in maintaining grid stability and reliability, he added.

While the journey is not easy, Shanxi’s transformation is part of China’s broader effort to meet climate goals and reduce carbon emissions. By investing in renewable energy, Shanxi is not only contributing to national goals, but also creating new economic opportunities and jobs in the region, Lin said.

As Shanxi continues to develop its solar energy capabilities, it is serving as a model for other regions looking to transition from traditional fossil fuels to sustainable energy sources. The province’s journey from coal-dependent to solar powerhouse reflects the potential for innovation and progress in the face of environmental and economic challenges, Lin said.

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