KPMG China Says Energy Has Become a Board-Level Variable for Large Companies
KPMG China said energy has moved from a cost item to a board-level operating variable for large companies, as Jiemian News reported on September 11 during the 2026 China International Fair for Trade in Services. KPMG China Energy Transition and Circular Economy lead partner Li Jing said firms now face three simultaneous changes: shifting prices as power market rules evolve and China expands its carbon market to steel, cement and aluminum smelting; customers demanding proof of emissions, energy sources and accounting methods; and AI computing reshaping electricity demand from an access issue into a planning issue.
Li said the rules for Chinese energy companies going overseas have changed, citing the EU carbon border adjustment mechanism taking effect from 2026, the European Commission's Foreign Subsidies Regulation and the U.S. Inflation Reduction Act and related tax guidance. He said project returns are now shaped by product pricing, customer access, supply-chain structure and tax eligibility, while overseas project cash flow does not guarantee money can be repatriated to the parent group. He also said companies should stress-test major overseas investments against carbon-border rules, subsidies, critical minerals, trade restrictions, data rules and localization requirements.
China's 15th Five-Year Plan for the energy system sets a 2030 target to initially build a new power system, including a 50% share of non-fossil power generation, high-level consumption of more than 2.8 billion kilowatts of new energy, charging infrastructure for more than 110 million electric vehicles, around 410 million kilowatts of conventional hydropower, about 110 million kilowatts of nuclear power, and about 65 million kilowatts of biomass, solar thermal, geothermal and marine energy capacity. KPMG China board member and Asia-Pacific and China energy, natural resources and chemicals lead partner Cai Zhongquan said these targets mean energy companies need systemic restructuring, not incremental optimization, and should expand into new businesses such as direct green power supply, zero-carbon parks and vehicle-grid interaction.
Li said short-duration storage, especially on the grid side and in commercial and industrial use, is the most likely area for near-term commercialization, while hydrogen is unlikely to achieve an economic breakthrough within two to three years. He said the real winners in the next two to three years will be scenarios whose revenue mechanisms are first recognized by rules, rather than technologies with the fastest cost declines.
