China could stop importing crude oil in 20 years as the country accelerates the installation of renewable energy capacity and energy storage, a National People’s Congress deputy has forecast.

The transition to improve China’s energy security will require installing more solar and other renewable capacity and developing an energy grid – which can be empowered with the help of artificial intelligence – that supports the renewable capacity.

That was the message Liu Hanyuan, the billionaire founder and chairman of the Tongwei Group, delivered in Beijing ahead of the opening of the “two sessions” annual plenary meeting of China’s congress.  

China is the world’s largest importer of crude oil, while Russia is the top supplier followed by Saudi Arabia. 

According to Chinese media reports on Tuesday, Liu said China imported 553 million tonnes of crude oil worth US$325 billion in foreign exchange reserves last year, with its import reliance posing a risk to domestic energy security.

“China is fully equipped to replace the more than 500 million tonnes of crude oil consumed each year in about 20 years,” he said.

Liu began investing in renewable energy around two decades ago when he acquired a stake in a small solar firm that has become the largest solar cell manufacturer in the world, Tongwei Solar.

Liu estimated that in about 20 years, the country’s installed renewable energy capacity and supporting energy storage and other grid infrastructure would have an average annual investment intensity of 10 to 20 trillion yuan (US$1.4-2.8 trillion).

This would help China achieve carbon neutrality five to 10 years ahead of its 2060 goal, replace real estate as an engine to drive economic development and help push the production capacity of manufacturing industries.

“Solar has become the second-largest power source in [China] in terms of installed capacity, and is expected to become the largest power source next year, or the year after at the latest,” he said.

China reached a cumulative installed solar capacity of more than 886 gigawatts last year, accounting for nearly half the approximately 2,000GW installed globally. Liu said there remained a long way to go to install enough capacity to meet domestic and global climate goals.

“China needs to add an average of 500-700GW of photovoltaic installations each year to achieve carbon neutrality between 2050 and 2060,” he said.

He said that to meet the “urgent need for energy transformation” and respond to the risks of international trade barriers, China should help accelerate domestic solar power generation, expand installations and develop other renewable energy sources.

In his remarks, Liu also emphasised China’s key role in new energy manufacturing, saying that the country’s photovoltaic industry accounted for more than 85 per cent of global market share, with the lowest manufacturing cost in the world.

“Automation, intelligence and product quality are all at the world’s leading level,” he said.

Liu also highlighted the growth of China’s “new three products” manufacturing and called on the government to support developing and exporting them.

“By the end of 2024, China’s photovoltaic, lithium-ion batteries and new energy vehicles will account for 85 per cent, 79.8 per cent and 70.4 per cent of the global market respectively, with a large leading advantage,” he said.

Liu recommended that the Chinese government accommodate more cross-border information sharing in these areas, including promptly publicising trade barriers and regulatory measures, as well as simplifying customs clearance.

Chinese companies should also invest in new energy products in Belt and Road Initiative countries, which would “enable Chinese companies to expand overseas markets, obtain reasonable returns, enhance global visibility and influence and achieve mutual benefit”.

As renewable energy capacity grows, China’s power grid will need to adapt to the intermittency and volatility of renewable energy sources.

“Historically, my country’s power grid has shown the characteristics of ‘focusing on generation and neglecting transmission’,” Liu said.

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He said the construction of the power grid lagged behind the development of renewable energy and was the main barrier to China’s energy transformation.

In January, China’s National Energy Administration announced that installed new energy storage capacity had reached around 74GW by the end of last year.

He recommended that China speed up the construction of ultra-high-voltage electricity transmission and support the development of projects where power supply, grid, load, and energy storage were integrated into one plant.

“It is recommended to use AI to empower new power systems”, including integrating artificial intelligence with energy storage and electric vehicles, Liu said.