On June 10, 2025, China’s natural gas producers are intensifying efforts to persuade the central government to accelerate the development of gas-fired power plants, as part of a broader strategy to revitalize faltering demand. Currently, the power generation sector accounts for approximately 18% of the nation’s gas consumption and is being identified by industry leaders as a key growth engine moving forward.

According to individuals involved in energy policy discussions, a new industry proposal calls for the addition of nearly 70 gigawatts (GW) of gas-fired generation capacity by 2030. This would represent a nearly 50% increase over the expected capacity in 2025. These proposals are being submitted as part of early-stage consultations for China’s next five-year plan, which is set to be finalized and approved by the National People’s Congress in March 2026. The upcoming plan will play a crucial role in defining the nation’s economic, environmental, and energy security priorities through the end of the decade.

China’s once-rapidly growing natural gas demand has slowed significantly in recent years. This deceleration is attributed to multiple factors, including weakening industrial activity, rapid gains in renewable energy deployment, and a continued reliance on cost-competitive coal. Additionally, an unusually mild winter and elevated inventory levels have prompted analysts to lower projections for liquefied natural gas (LNG) imports in 2025, with volumes expected to decline from the previous year.

For domestic gas producers—many of whom have shifted focus toward natural gas as oil consumption growth stalls—targeting the power sector offers a strategic opportunity to offset softer demand in other segments such as residential heating. The earlier nationwide coal-to-gas conversion initiative, which drove significant gains in household gas use, has largely concluded. Simultaneously, slower urbanization and improved air quality have limited further residential expansion.

While China is pursuing electricity market reforms that emphasize cost efficiency, gas-fired power remains more expensive than renewable alternatives like solar, which currently trades at less than half the price. However, gas power offers critical operational advantages—it can be ramped up much faster than coal or nuclear, making it a valuable backup for intermittent solar and wind generation. This flexibility could secure gas a niche role in China’s evolving energy mix, even as renewables dominate in terms of total capacity.

Despite these advantages, significant structural barriers remain. LNG imports are still substantially more expensive than domestic coal or renewables. Meanwhile, tapping local shale and coalbed methane reserves remains technically challenging and costly. Limited gas storage infrastructure further restricts gas’s ability to respond effectively to seasonal demand spikes, posing additional obstacles to large-scale expansion.