Energy Insider: Green Ammonia Plant With ‘Standalone’ Power Grid Starts Running, Solar Majors Plan to Bail Out Struggling Rivals

This week’s Caixin energy wrap highlights several key developments in China’s energy and climate sectors, including significant advances in green hydrogen and ammonia production, the country’s leadership in global offshore wind capacity, major solar industry restructuring, and new renewable energy mandates for heavy industries. Below is a detailed summary, with paragraph indicators embedded for each major point:

1. Green Hydrogen and Ammonia Plant Launch: Envision Group has inaugurated what its CEO Zhang Lei calls "the world’s largest and most cost-competitive project for producing green hydrogen and ammonia" in Chifeng, Inner Mongolia. The facility currently produces 320,000 tons of ammonia annually and aims to reach 1.52 million tons once fully operational. The process uses renewable electricity, primarily wind and solar, to electrolyze water and combine the resulting hydrogen with nitrogen to make ammonia. Plans are underway to begin shipping pure hydrogen in the future. Green ammonia is significant for decarbonizing sectors like heavy industry and transportation, and as a substitute for conventional fertilizers, which are major greenhouse gas emitters globally—producing more emissions than the aviation and shipping industries combined. [para. 5][para. 6][para. 7][para. 8][para. 9][para. 10]

2. Solar Industry Restructuring: Amid an ongoing supply glut and intense competition, China’s largest polysilicon producers—essential for solar cell production—are orchestrating a joint bailout to acquire weaker rivals. Industry leaders, including Tongwei Co. Ltd. and GCL Technology Holdings Ltd., plan to consolidate excess factory capacity and absorb the debts of struggling firms. This emergency intervention, which began negotiations earlier this year and has broad support, aims to halt "involution"—destructive internal competition that has led to plummeting prices and heavy financial losses, particularly in the upstream polysilicon sector. [para. 11][para. 12][para. 13][para. 14][para. 15][para. 16]

3. Offshore Wind Leadership: China remains at the forefront of global offshore wind expansion, adding 4.4 gigawatts (GW) of new capacity last year, nearly 55% of the world’s total additions, according to Global Energy Monitor (GEM). Over the past five years, China’s offshore wind capacity has grown at a 41% compound annual rate, more than twice the global average. Offshore wind is strategically important for decarbonizing China’s coastal industrial regions. However, following the cessation of government subsidies in 2021, the growth rate has slowed significantly, dropping from a 206% year-on-year increase in 2021 to just 12% in 2024. This slowdown resulted from a surge of new grid connections to qualify for subsidies before cuts, followed by a steep drop in new projects. [para. 17][para. 18][para. 19][para. 20][para. 22][para. 23][para. 24]

4. Renewable Energy Mandates for Heavy Industry: China has established new renewable electricity usage targets for key energy-intensive industries including aluminum, steel, polysilicon, and cement. These targets, set by the state economic planner and energy regulator, vary regionally—from 25.2% in Fujian province to 70% in provinces such as Sichuan, Yunnan, and Qinghai. Newly built data centers in designated areas must also use 80% renewable electricity. Currently, only the aluminum industry must meet its targets in 2024, while others are being monitored. The new directives send a strong message that persistent regulatory compliance now depends on purchasing green energy, signaling an ongoing shift in industrial energy sourcing. [para. 25][para. 26][para. 27][para. 28][para. 29][para. 30]