Amid heightened concern last winter about the security of the electricity supply across the island of Great Britain, National Grid Electricity System Operator (ESO) brought in a first-of-its-kind demand-management system.
The Demand Flexibility Service (DFS) relied on consumers reacting to notifications from the operator to help reduce their demand and keep the island’s grid secure during times of particular strain. (The island’s grid incorporates England, Scotland and Wales, but not Northern Ireland.)
Over the course of the winter of 2022/23, the system-level impact of DFS was significant, reducing demand by 2.92 gigawatt hours (GWh) from times of grid strain, according to a recent report from the Centre for Net Zero.
This is equivalent to the electricity needed for every person in Great Britain to make a large cup of tea, it claims.
This helped ensure, it adds, that the ”lights stayed on” and reduced the need for reliance on coal-fired power stations or exceptionally expensive alternatives. Additionally, 681 tonnes of carbon dioxide (tCO2) emissions were avoided through the use of DFS.
ESO has reintroduced the service for 2023/24, with the first session taking place on 16 November.
The Q&A below examines what the service has achieved – and whether it offers value for money.
- What is the ‘demand flexibility service’ and why was it created?
- Who took part in last year’s trial of the service and why?
- What did the demand flexibility service achieve?
- Did the demand flexibility service offer value for money?
- What will the service look like in winter 2023-24?
What is the ‘demand flexibility service’?
In 2022, ESO launched its new DFS to provide an additional mechanism to support energy security over the winter.
There was heightened concern about the potential of blackouts over the winter of 2022/23, due to the volatility in the gas market, exacerbated substantially by the Russian invasion of Ukraine earlier that year.
As such, in its Winter Outlook report, the operator added new tools in the form of securing contingency contracts with coal-fired power plants and launching DFS.
From 1 November 2022, DFS started to incentivise users to reduce consumption during key times, to reduce the overall demand across the system.
Households with a smart meter or business sites with half-hourly metering were eligible to sign up to the scheme and could sign up through either their supplier or a technology provider. In total, there were 31 providers that registered by the end of the DFS period in March 2023.
This was made up of 14 “domestic only”, 10 “non-domestic only” and seven “both domestic and non-domestic”.
DFS was designed so that the ESO could notify providers about the times when capacity on the grid was expected to be tight, allowing them to reach out to their customers who had signed up to the scheme. They could then opt-in to the DFS sessions and work to reduce their demand during the specified periods.
Over the winter of 2022/23, there were 20 test events – which were used to “onboard” providers – and two live uses of DFS, where it was used to ensure there was sufficient capacity to meet demand. These sessions had a duration of 60, 90 and 120 minutes.
Across the test events, ESO established a guaranteed “acceptance price” of £3,000 per megawatt hour (/MWh) for all bids submitted by DFS providers. This was designed to offer assurance to providers.
During the live events, DFS providers presented bids at higher prices than the guaranteed acceptance price, allowing them to incentivise participants further and, therefore, provide more substantial demand reductions during times when balancing the grid was particularly challenging.
The two live events – which took place on 23 and 24 January 2023 – saw providers submit bids within the range of £3,300/MWh and £6,500/MWh, according to data from LCP Delta.
Who took part in last year’s trial of the service?
Between November and March, 1.6m households and businesses participated in DFS, according to the ESO.
Collectively, they provided ~350MW of flexibility during events, helping to avoid blackouts during periods of particular constraint on the grid.
According to a survey conducted by the system operator, a wide range of households took part in DFS. Of those surveyed, 30% had a health condition or long-term illness, 18% were tenants and 30% lived in households with three or more people. This highlighted the low barriers to participation of DFS, according to ESO.
There were still groups that were underrepresented, including younger age groups, lower income households, renters and city residents.
According to ESO’s survey, those under the age of 45 were underrepresented in DFS participation in comparison with the British population. (Britain’s electricity system covers England, Wales and Scotland, therefore, the population of Northern Ireland was not eligible to take part in DFS.) The most pronounced underrepresentation was seen in those aged 18-19 and 20-24 years old. The most overrepresented age groups were 55-64 and 65-74.
Within the under-45 age group, women made up the majority of participants, whereas in the over-45 group men made up the majority. Overall, 54.9% of those surveyed identified as female, in comparison with 51.7% of the British population, the survey continues.
The white ethnic group was overrepresented, with 95.7% of respondents falling within the category, notes the ESO, compared to 82.7% of the British population (a 13% difference).
All other groups were underrepresented, with Asian or Aisan British the most severely so, with only 2.4% of respondents compared to 8.7% of the British population (6.3% difference).
The majority of participants took part for the financial benefits, be they savings or rewards. Of those surveyed by ESO, 76% selected this as their main motivation.
Beyond this, 41% of households were motivated by the challenge of responding and 37% by balancing the grid.
The actions taken by participants to reduce demand varied, with the majority (three-in-four) shifting demand, according to the Centre for Net Zero’s research. For example, shifting the times they used high-load appliances, such as heating or ovens, by an hour, to avoid the DFS session.
Around one-in-two participants reported “demand destruction” in at least one event, according to the research. This is where the demand is completely removed – for example, households who chose to go for a walk instead of putting on the television and did not subsequently watch an extra hour of television later to make up for it.
The Centre for Net Zero’s research found that 17% of participants manually switched off appliances, while the rest scheduled them to either come on before or after the event.
What did the demand flexibility service achieve?
Overall, DFS was considered a success, delivering a total of 3,300MWh of electricity reduction across the 22 events, according to ESO. This is nearly enough to power 10m homes for an hour during peak times across the island of Great Britain.
Through demand reduction, DFS is considered to have avoided a total of 681tCO2.
Great Britain was spared blackouts over the winter of 2023/24 – while services such as DFS played a role in helping to keep the grid balanced and secure during this time. Favourably warm weather, among other factors, also played a role.
Additionally, DFS provided financial benefits to participants. For example, CUB, a family-run commercial energy and utilities consultants business, introduced the CUB Reduction Reward Scheme, allowing its customers to participate in DFS.
In a case study released by ESO, it highlighted that throughout six events, there was an average of 86 businesses taking part in each through the CUB Reduction Reward Scheme. Participants ranged from using 14,000 kilowatt hours (kwh) to 14,000,000kwh per annum.
As of 30 January, participants had earned £34,025, with one business earning £1,726 in one event. Over these events, CUB delivered 12MWh of energy reduction, and avoided 945kg of carbon emissions.
With regard to the domestic market, 13 sessions were offered to 1.4m Octopus Energy customers over the course of last winter, via financial incentives. Overall, the company’s “Saving Sessions” resulted in a reduction in energy demand of 12-25%.
The trial also managed to answer several questions around the potential of demand schemes and the challenges they may face.
For example, the impact of cold weather on the willingness of participants to reduce their demand was an area in need of data, with heating being one of the easier and more common energy uses to turn down during DFS sessions.
Those who opted into Octopus’s Saving Sessions on cold winter days provided a “mean average turndown” of 0.2kW, a similar level to mild or warm days. If this was scaled to the UK’s 30m households at the same rate of participation (one-in-three), the company estimates that would equate to around 2GW of consumer flexibility on cold winter days.
This is roughly equivalent to the entire capacity of Britain’s contingency coal power plants.
Did the demand flexibility service offer value for money?
Overall, ESO paid households and businesses nearly £11m to reduce their power use during the DFS period of 2022/23.
As such, the average cost per megawatt hour of reduced electricity was around £3,330/MWh across the 22 sessions. While this is relatively high, it is also reflective of the scarcity of the use of the service. This is not a cost paid out consistently, but only in the tightest of periods where the alternative options were expensive fossil-fuel generators.
During the same winter, some gas-fired power plants cost up to £6,000/MWh, for example.
Across the two live events, ESO paid more than £3m to suppliers, split between around £850,000 during the shorter event on Monday 23 January and £2.1m for the longer session on Tuesday 24 January.
These arguably provide a clearer picture of what this service could cost in the future, given they allow suppliers to bid what they are happy to pay as opposed to the guaranteed price offered during the test sessions.
For example, during the first live session on Monday 23 January, 400,000 customers participated and were given £3.37/kWh of electricity demand they reduced. Customers were offered £4/kWh on Tuesday 24 January, as ESO accepted a higher bid.
By contrast, ESO’s other additional measure for the winter of 2022/23 was to contract five coal units to stay online under contingency contracts. This was estimated to cost between £340m and £395m, subject to the procurement and use of the coal.
While the coal units were “warmed” six times, according to the Centre for Net Zero’s research, they were not ultimately used. ESO paid approximately £6,000/h to the plants that were warmed, in order to synchronise them with the grid frequency.
ESO has not contracted them for the coming winter.
DFS cost approximately £10.5m in total meaning 2.7% of the capacity payments were spent on the contingency coal contracts.
The Centre for Net Zero’s research, completed a welfare analysis to explore what the marginal social benefits of the policy were with regards to the net cost to the government.
In doing so, it found Octopus’ Saving Sessions demonstrated a marginal value of public funds (MVPF) – which is calculated by dividing the beneficiaries’ willingness to pay by the net costs of the policy – of between 1.05 and 2.6.
This metric shows that the welfare impacts of DFS are sensitive to the extent to which demand response reduces the likelihood of “lost load”, namely, the security of the electricity supply. If it is considered to have reduced the likelihood of a blackout, the MVPF is high, with 2.6 larger than many other popular policy programs, such as housing vouchers, job training, cash transfers, and adult-health subsidies, according to the Centre for Net Zero.
The report notes that during DFS events – when the grid was particularly strained – a marginal unit of electricity would have been sourced from a carbon-intensive gas or coal-fired power plant. These would incur a “marginal private cost” of £835/MWh on average for the ESO, with a maximum of £5,500/MWh, plus the social cost of continued fossil fuel reliance.
It is a difficult balance for the operator to ensure the service offers value for money, while paying consumers enough to make participation attractive.
Lucy Yu, the Centre for Net Zero’s CEO, tells Carbon Brief:
“The DFS is one of the biggest innovations the grid has seen in years. Our analysis shows consumers can offer gigawatt-scale flexibility, at good value for public money. This value exceeds policy spending in areas such as adult education, healthcare and housing.”
According to figures from Octopus in January, the average saving for a household was 23p for each test event. Some participants saved up to £4.35 for each session.
During the first live test, the largest savings seen by domestic users were about £8.75 for the hour.
The supplier estimates that a customer that reduced its demand by 1kWh during 25 events at an average of £4/kWh – as seen in the second live event – could save £100 over a winter.
What will the service look like in winter 2023-24?
DFS has been reintroduced for winter 2023/24. It began on 1 November, with the first test event taking place on 16 November. The first live event has now been announced for 29 November.
As with last year, ESO will run 12 incentivised test events that consumers and businesses can participate in. A guaranteed acceptance price of £3/kWh will be on offer to suppliers, aggregators and businesses for at least six of the test events.
According to the surveys conducted by the Centre for Net Zero, 92% of customers were “very interested” in continuing to participate in future sessions year-round.
DFS remains in a trial stage, with lessons yet to be learnt before it could be truly integrated into the ESO’s system stability services. As such, there are a number of changes made to this year’s service, including the lead time given by the ESO, changes to metering requirements and the ability for providers to make the service “opt-out” rather than “opt-in”.
While the DFS is currently only used to reduce demand, there is also the potential that such a system could be used in the future to manage periods of high generation on the system.
For example, during a period of low demand, such as in the middle of the night, when there is high wind generation. Currently, wind generation has to be “curtailed” to protect the system if there is more generation than demand. DFS could be used to increase demand to take advantage of such periods.
Of those surveyed by the Centre for Net Zero, 81% said they were interested in using more energy to avoid curtailment.
Yu tells Carbon Brief:
“As the energy system evolves to optimise demand closer to real-time, it is important to understand the role schemes such as the DFS might play – including as an important contingency resource targeted at times and locations where it is needed most.
“In the near term, it is a critical tool that allows us to raise consumer awareness of demand response, scale flexibility behaviours and deliver meaningful value to both the grid and households, transforming the relationship between the two.”
The post Q&A: How Great Britain’s ‘demand flexibility service’ is cutting costs and CO2 emissions appeared first on Carbon Brief.
Q&A: How Great Britain’s ‘demand flexibility service’ is cutting costs and CO2 emissions
Climate Change
DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss?
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Secrets and layoffs
UNLAWFUL PANEL: A federal judge ruled that the US energy department “violated the law when secretary Chris Wright handpicked five researchers who rejected the scientific consensus on climate change to work in secret on a sweeping government report on global warming”, reported the New York Times. The newspaper explained that a 1972 law “does not allow agencies to recruit or rely on secret groups for the purposes of policymaking”. A Carbon Brief factcheck found more than 100 false or misleading claims in the report.
DARKNESS DESCENDS: The Washington Post reportedly sent layoff notices to “at least 14” of its climate journalists, as part of a wider move from the newspaper’s billionaire owner, Jeff Bezos, to eliminate 300 jobs at the publication, claimed Climate Colored Goggles. After the layoffs, the newspaper will have five journalists left on its award-winning climate desk, according to the substack run by a former climate reporter at the Los Angeles Times. It comes after CBS News laid off most of its climate team in October, it added.
WIND UNBLOCKED: Elsewhere, a separate federal ruling said that a wind project off the coast of New York state can continue, which now means that “all five offshore wind projects halted by the Trump administration in December can resume construction”, said Reuters. Bloomberg added that “Ørsted said it has spent $7bn on the development, which is 45% complete”.
Around the world
- CHANGING TIDES: The EU is “mulling a new strategy” in climate diplomacy after struggling to gather support for “faster, more ambitious action to cut planet-heating emissions” at last year’s UN climate summit COP30, reported Reuters.
- FINANCE ‘CUT’: The UK government is planning to cut climate finance by more than a fifth, from £11.6bn over the past five years to £9bn in the next five, according to the Guardian.
- BIG PLANS: India’s 2026 budget included a new $2.2bn funding push for carbon capture technologies, reported Carbon Brief. The budget also outlined support for renewables and the mining and processing of critical minerals.
- MOROCCO FLOODS: More than 140,000 people have been evacuated in Morocco as “heavy rainfall and water releases from overfilled dams led to flooding”, reported the Associated Press.
- CASHFLOW: “Flawed” economic models used by governments and financial bodies “ignor[e] shocks from extreme weather and climate tipping points”, posing the risk of a “global financial crash”, according to a Carbon Tracker report covered by the Guardian.
- HEATING UP: The International Olympic Committee is discussing options to hold future winter games earlier in the year “because of the effects of warmer temperatures”, said the Associated Press.
54%
The increase in new solar capacity installed in Africa over 2024-25 – the continent’s fastest growth on record, according to a Global Solar Council report covered by Bloomberg.
Latest climate research
- Arctic warming significantly postpones the retreat of the Afro-Asian summer monsoon, worsening autumn rainfall | Environmental Research Letters
- “Positive” images of heatwaves reduce the impact of messages about extreme heat, according to a survey of 4,000 US adults | Environmental Communication
- Greenland’s “peripheral” glaciers are projected to lose nearly one-fifth of their total area and almost one-third of their total volume by 2100 under a low-emissions scenario | The Cryosphere
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Solar power, electric vehicles and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment, according to new analysis for Carbon Brief (shown in blue above). Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP) – comparable to the economies of Brazil or Canada, the analysis said.
Spotlight
Can humans reverse nature decline?
This week, Carbon Brief travelled to a UN event in Manchester, UK to speak to biodiversity scientists about the chances of reversing nature loss.
Officials from more than 150 countries arrived in Manchester this week to approve a new UN report on how nature underpins economic prosperity.
The meeting comes just four years before nations are due to meet a global target to halt and reverse biodiversity loss, agreed in 2022 under the landmark “Kunming-Montreal Global Biodiversity Framework” (GBF).
At the sidelines of the meeting, Carbon Brief spoke to a range of scientists about humanity’s chances of meeting the 2030 goal. Their answers have been edited for length and clarity.
Dr David Obura, ecologist and chair of Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)
We can’t halt and reverse the decline of every ecosystem. But we can try to “bend the curve” or halt and reverse the drivers of decline. That’s the economic drivers, the indirect drivers and the values shifts we need to have. What the GBF aspires to do, in terms of halting and reversing biodiversity loss, we can put in place the enabling drivers for that by 2030, but we won’t be able to do it fast enough at this point to halt [the loss] of all ecosystems.
Dr Luthando Dziba, executive secretary of IPBES
Countries are due to report on progress by the end of February this year on their national strategies to the Convention on Biological Diversity [CBD]. Once we get that, coupled with a process that is ongoing within the CBD, which is called the global stocktake, I think that’s going to give insights on progress as to whether this is possible to achieve by 2030…Are we on the right trajectory? I think we are and hopefully we will continue to move towards the final destination of having halted biodiversity loss, but also of living in harmony with nature.
Prof Laura Pereira, scientist at the Global Change Institute at Wits University, South Africa
At the global level, I think it’s very unlikely that we’re going to achieve the overall goal of halting biodiversity loss by 2030. That being said, I think we will make substantial inroads towards achieving our longer term targets. There is a lot of hope, but we’ve also got to be very aware that we have not necessarily seen the transformative changes that are going to be needed to really reverse the impacts on biodiversity.
Dr David Cooper, chair of the UK’s Joint Nature Conservation Committee and former executive secretary of the Convention on Biological Diversity
It’s important to look at the GBF as a whole…I think it is possible to achieve those targets, or at least most of them, and to make substantial progress towards them. It is possible, still, to take action to put nature on a path to recovery. We’ll have to increasingly look at the drivers.
Prof Andrew Gonzalez, McGill University professor and co-chair of an IPBES biodiversity monitoring assessment
I think for many of the 23 targets across the GBF, it’s going to be challenging to hit those by 2030. I think we’re looking at a process that’s starting now in earnest as countries [implement steps and measure progress]…You have to align efforts for conserving nature, the economics of protecting nature [and] the social dimensions of that, and who benefits, whose rights are preserved and protected.
Neville Ash, director of the UN Environment Programme World Conservation Monitoring Centre
The ambitions in the 2030 targets are very high, so it’s going to be a stretch for many governments to make the actions necessary to achieve those targets, but even if we make all the actions in the next four years, it doesn’t mean we halt and reverse biodiversity loss by 2030. It means we put the action in place to enable that to happen in the future…The important thing at this stage is the urgent action to address the loss of biodiversity, with the result of that finding its way through by the ambition of 2050 of living in harmony with nature.
Prof Pam McElwee, Rutgers University professor and co-chair of an IPBES “nexus assessment” report
If you look at all of the available evidence, it’s pretty clear that we’re going to keep experiencing biodiversity decline. I mean, it’s fairly similar to the 1.5C climate target. We are not going to meet that either. But that doesn’t mean that you slow down the ambition…even though you recognise that we probably won’t meet that specific timebound target, that’s all the more reason to continue to do what we’re doing and, in fact, accelerate action.
Watch, read, listen
OIL IMPACTS: Gas flaring has risen in the Niger Delta since oil and gas major Shell sold its assets in the Nigerian “oil hub”, a Climate Home News investigation found.
LOW SNOW: The Washington Post explored how “climate change is making the Winter Olympics harder to host”.
CULTURE WARS: A Media Confidential podcast examined when climate coverage in the UK became “part of the culture wars”.
Coming up
- 2-8 February: 12th session of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), Manchester, UK
- 8 February: Japanese general election
- 8 February: Portugal presidential election
- 11 February: Barbados general election
- 11-12 February: UN climate chief Simon Stiell due to speak in Istanbul, Turkey
Pick of the jobs
- UK Met Office, senior climate science communicator | Salary: £43,081-£46,728. Location: Exeter, UK
- Canadian Red Cross, programme officer, Indigenous operations – disaster risk reduction and climate change adaptation | Salary: $56,520-$60,053. Location: Manitoba, Canada
- Aldersgate Group, policy officer | Salary: £33,949-£39,253. Location: London (hybrid)
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 6 February 2026: US secret climate panel ‘unlawful’ | China’s clean energy boon | Can humans reverse nature loss? appeared first on Carbon Brief.
Climate Change
China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK
Welcome to Carbon Brief’s China Briefing.
China Briefing handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.
Key developments
Solar and wind eclipsed coal
‘FIRST TIME IN HISTORY’: China’s total power capacity reached 3,890 gigawatts (GW) in 2025, according to a National Energy Administration (NEA) data release covered by industry news outlet International Energy Net. Of this, it said, solar capacity rose 35% to 1,200GW and wind capacity was up 23% to 640GW, while thermal capacity – which is mostly coal – grew 6% to just over 1,500GW. This marks the “first time in history” that wind and solar capacity has outranked coal capacity in China’s power mix, reported the state-run newspaper China Daily. China’s grid-related energy storage capacity exceeded 213GW in 2025, said state news agency Xinhua. Meanwhile, clean-energy industries “drove more than 90%” of investment growth and more than half of GDP growth last year, said the Guardian in its coverage of new analysis for Carbon Brief. (See more in the spotlight below.)
DAWN FOR SOLAR: Solar power capacity alone may outpace coal in 2026, according to projections by the China Electricity Council (CEC), reported business news outlet 21st Century Business Herald. It added that non-fossil sources could account for 63% of the power mix this year, with coal falling to 31%. Separately, the China Renewable Energy Society said that annual wind-power additions could grow by between 600-980GW over the next five years, with annual additions of 120GW expected until 2028, said industry news outlet China Energy Net. China Energy Net also published the full CEC report.
STATE MEDIA VOICE: Xinhua published several energy- and climate-related articles in a series on the 15th five-year plan. One said that becoming a low-carbon energy “powerhouse” will support decarbonisation efforts, strengthen industrial innovation and improve China’s “global competitive edge and standing”. Another stated that coal consumption is “expected” to peak around 2027, with continued “growth” in the power and chemicals sector, while oil has already peaked. A third noted that distributed energy systems better matched the “characteristics of renewable energy” than centralised ones, but warned against “blind” expansion and insufficient supporting infrastructure. Others in the series discussed biodiversity and environmental protection and recycling of clean-energy technology. Meanwhile, the communist party-affiliated People’s Daily said that oil will continue to play a “vital role” in China, even after demand peaks.
Starmer and Xi endorsed clean-energy cooperation
CLIMATE PARTNERSHIP: UK prime minister Keir Starmer and Chinese president Xi Jinping pledged in Beijing to deepen cooperation on “green energy”, reported finance news outlet Caixin. They also agreed to establish a “China-UK high-level climate and nature partnership”, said China Daily. Xi told Starmer that the two countries should “carry out joint research and industrial transformation” in new energy and low-carbon technologies, according to Xinhua. It also cited Xi as saying China “hopes” the UK will provide a “fair” business environment for Chinese companies.
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OCTOPUS OVERSEAS: During the visit, UK power-trading company Octopus Energy and Chinese energy services firm PCG Power announced they would be starting a new joint venture in China, named Bitong Energy, reported industry news outlet PV Magazine. The move “marks a notable direct entry” of a foreign company into China’s “tightly regulated electricity market”, said Caixin.
PUSH AND PULL: UK policymakers also visited Chinese clean-energy technology manufacturer Envision in Shanghai, reported finance news outlet Yicai. It quoted UK business secretary Peter Kyle emphasising that partnering with companies “like Envision” on sustainability is a “really important part of our future”, particularly in terms of job creation in the UK. Trade minister Chris Bryant told Radio Scotland Breakfast that the government will decide on Chinese wind turbine manufacturer Mingyang’s plans for a Scotland factory “soon”. Researchers at the thinktank Oxford Institute for Energy Studies wrote in a guest post for Carbon Brief that greater Chinese competition in Europe’s wind market could “help spur competition in Europe”, if localisation rules and “other guardrails” are applied.
More China news
- LIFE SUPPORT: China will update its coal capacity payment mechanism, which will raise thresholds for coal-fired power plants and expand to cover gas-fired power and pumped and new-energy storage, reported current affairs outlet China News.
- FRONTIER TECH: The world’s “largest compressed-air power storage plant” has begun operating in China, said Bloomberg.
- PARTNERSHIP A ‘MISTAKE’: The EU launched a “foreign subsidies” probe into Chinese wind turbine company Goldwind, said the Hong Kong-based South China Morning Post. EU climate chief Wopke Hoekstra said the bloc must resist China’s pull in clean technologies, according to Bloomberg.
- TRADE SPAT: The World Trade Organization “backed a complaint by China” that the US Inflation Reduction Act “discriminated against” Chinese cleantech exports, said Reuters.
- NEW RULES: China has set “new regulations” for the Waliguan Baseline Observatory, which provides “key scientific references for the United Nations Framework Convention on Climate Change”, said the People’s Daily.
Captured
New or reactivated proposals for coal-fired power plants in China totalled 161GW in 2025, according to a new report covered by Carbon Brief.
Spotlight
Clean energy drove China’s economic growth in 2025
New analysis for Carbon Brief finds that clean-energy sectors contributed the equivalent of $2.1tn to China’s economy last year, making it a key driver of growth. However, headwinds in 2026 could restrict growth going forward – especially for the solar sector.
Below is an excerpt from the article, which can be read in full on Carbon Brief’s website.
Solar power, electric vehicles (EVs) and other clean-energy technologies drove more than a third of the growth in China’s economy in 2025 – and more than 90% of the rise in investment.
Clean-energy sectors contributed a record 15.4tn yuan ($2.1tn) in 2025, some 11.4% of China’s gross domestic product (GDP)
Analysis shows that China’s clean-energy sectors nearly doubled in real value between 2022-25 and – if they were a country – would now be the 8th-largest economy in the world.
These investments in clean-energy manufacturing represent a large bet on the energy transition in China and overseas, creating an incentive for the government and enterprises to keep the boom going.
However, there is uncertainty about what will happen this year and beyond, particularly due to a new pricing system, worsening industrial “overcapacity” and trade tensions.
Outperforming the wider economy
China’s clean-energy economy continues to grow far more quickly than the wider economy, making an outsized contribution to annual growth.
Without these sectors, China’s GDP would have expanded by 3.5% in 2025 instead of the reported 5.0%, missing the target of “around 5%” growth by a wide margin.
Clean energy made a crucial contribution during a challenging year, when promoting economic growth was the foremost aim for policymakers.
In 2024, EVs and solar had been the largest growth drivers. In 2025, it was EVs and batteries, which delivered 44% of the economic impact and more than half of the growth of the clean-energy industries.
The next largest subsector was clean-power generation, transmission and storage, which made up 40% of the contribution to GDP and 30% of the growth in 2025.
Within the electricity sector, the largest drivers were growth in investment in wind and solar power generation capacity, along with growth in power output from solar and wind, followed by the exports of solar-power equipment and materials.
But investment in solar-panel supply chains, a major growth driver in 2022-23, continued to fall for the second year, as the government made efforts to rein in overcapacity and “irrational” price competition.
Headwinds for solar
Ongoing investment of hundreds of billions of dollars represents a gigantic bet on a continuing global energy transition.
However, developments next year and beyond are unclear, particularly for solar. A new pricing system for renewable power is creating uncertainty, while central government targets have been set far below current rates of clean-electricity additions.
Investment in solar-power generation and solar manufacturing declined in the second half of the year.
The reduction in the prices of clean-energy technology has been so dramatic that when the prices for GDP statistics are updated, the sectors’ contribution to real GDP – adjusted for inflation or, in this case deflation – will be revised down.
Nevertheless, the key economic role of the industry creates a strong motivation to keep the clean-energy boom going. A slowdown in the domestic market could also undermine efforts to stem overcapacity and inflame trade tensions by increasing pressure on exports to absorb supply.
Local governments and state-owned enterprises will also influence the outlook for the sector.
Provincial governments have a lot of leeway in implementing the new electricity markets and contracting systems for renewable power generation. The new five-year plans, to be published this year, will, therefore, be of major importance.
This spotlight was written for Carbon Brief by Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA), and Belinda Schaepe, China policy analyst at CREA. CREA China analysts Qi Qin and Chengcheng Qiu contributed research.
Watch, read, listen
PROVINCE INFLUENCE: The Institute for Global Decarbonization Progress, a Beijing-based thinktank, published a report examining the climate-related statements in provincial recommendations for the 15th five-year plan.
‘PIVOT’?: The Outrage + Optimism podcast spoke with the University of Bath’s Dr Yixian Sun about whether China sees itself as a climate leader and what its role in climate negotiations could be going forward.
COOKING FOR CLEAN-TECH: Caixin covered rising demand for China’s “gutter oil” as companies “scramble” to decarbonise.
DON’T GO IT ALONE: China News broadcast the Chinese foreign ministry’s response to the withdrawal of the US from the Paris Agreement, with spokeswoman Mao Ning saying “no country can remain unaffected” by climate change.
$6.8tn
The current size of China’s green-finance economy, including loans, bonds and equity, according to Dr Ma Jun, the Institute of Finance and Sustainability’s president,in a report launch event attended by Carbon Brief. Dr Ma added that “green loans” make up 16% of all loans in China, with some areas seeing them take a 34% share.
New science
- China’s official emissions inventories have overestimated its hydrofluorocarbon emissions by an average of 117m tonnes of carbon dioxide equivalent (mtCO2e) every year since 2017 | Nature Geoscience
- “Intensified forest management efforts” in China from 2010 onwards have been linked to an acceleration in carbon absorption by plants and soils | Communications Earth and Environment
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China Briefing is written by Anika Patel and edited by Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 5 February 2026: Clean energy’s share of economy | Record renewables | Thawing relations with UK appeared first on Carbon Brief.
Under pressure from Congress, President Donald Trump quietly signed into law a funding package that provides billions of dollars more in foreign assistance spending than he had originally wanted to for the fiscal year between October 2025 and September 2026.
The legislation allocates $50 billion, $9 billion less than the level agreed the previous year under President Biden but $19 billion more than Trump proposed, restoring health and humanitarian aid spending to near pre-Trump levels.
Democratic Senator Patty Murray, vice-chair of the committee on appropriations, said that “while including some programmatic funding cuts, the bill rejects the Trump administration’s evisceration of US foreign assistance programmes”.
But, with climate a divisive issue in the US, spending on dedicated climate programmes was largely absent. Clarence Edwards, executive director of E3G’s US office, told Climate Home News that “the era of large US government investment in climate policy is over, at least for the foreseeable future”.
The package ruled out any support for the Climate Investment Funds’ Clean Technology Fund, which supports low-carbon technologies in developing countries and had received $150 million from the US in the previous fiscal year.
The US also made no pledge to the Africa Development Fund (ADF) – a mechanism run by the African Development Bank that provides grants and low-interest loans to the poorest African nations. A government spokesperson told Reuters that decision reflected concerns that “like too many other institutions, the ADF has adopted a disproportionate focus on climate change, gender, and social issues”.
GEF spared from cuts
Trump did, however, agree to Congress’s request to make $150 million – more than last year – available for the Global Environment Facility (GEF), which tackles environmental issues like biodiversity loss, land degradation and climate change.
Edwards said that GEF funding “survived due to Congressional pushback and a refocus on non-climate priorities like biodiversity, plastics and ocean ecosystems, per US Treasury guidance”.
Congress also pressured Trump into giving $54 million to the Rome-based International Fund for Agricultural Development. Its goals include helping small-scale farmers adapt to climate change and reduce emissions.
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Explainer: Out of Paris, but will the US formally quit the UN climate regime?
The Trump administration has decided to withdraw the US from the broader UN climate convention, raising questions about the legality of the move and what it means in practice -
‘America needs you’: US seeks trade alliance to break China’s critical mineral dominance
The US has signed nearly a dozen mineral deals with countries as it called for the creation of a trading bloc to diversify supply chains away from China
Without any pressure from Congress, Trump approved tens of millions of dollars each for multilateral development banks in Asia, Africa and Europe and just over a billion dollars for the World Bank’s International Development Association, which funds development projects in the world’s poorest countries.
As most of these banks have climate programmes and goals, much of this money is likely to be spent on climate action. The largest lender, the World Bank, aims to devote 45% of its finance to climate programmes, although, as Climate Home News has reported, its definition of climate spending is considered too loose by some analysts.
The bill also earmarks $830 million – nearly triple what Trump originally wanted – for the Millennium Challenge Corporation, a George W. Bush-era institution that has increasingly backed climate-focussed projects like transmission lines to bring clean hydropower to cities in Nepal.
No funding boost for DFC
While Congress largely increased spending, it rejected Trump’s call for nearly $4 billion for the Development Finance Corporation (DFC), granting just under $1 billion instead – similar to previous years.
Under Biden, there had been a push to get the DFC to support clean energy projects. But the Trump administration ended DFC’s support for projects like South Africa’s clean energy transition.
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Trump shifts US funds from shutting down foreign fossil fuels to expanding them
The US administration has pulled clean energy and just transition funding in South Africa and is pressuring EXIM and the World Bank to back fossil fuels -
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Since the multinational sold its assets in Nigeria’s oil hub, data analysis for Climate Home News shows flaring has risen, harming locals and the climate
At a recent board meeting, the DFC’s board – now dominated by Trump administration officials – approved US financial support for Chevron Mediterranean Limited, the developers of an Israeli gas field.
Kate DeAngelis, deputy director at Friends of the Earth US told Climate Home News it was good for the climate that Trump had not been able to boost the DFC’s budget. “DFC seems set up to focus mainly on the dirtiest deals without any focus on development,” she said.
US Congressional elections in November could lead to Democrats retaking control of one or both houses of Congress. Edwards said that “Democratic gains might restore funding [in the next fiscal year], while Republican holds would likely extend cuts”.
But he warned that “budgetary pressures and a murky economic environment don’t hold promise of increases in US funding for foreign assistance and climate programs, regardless of which party controls Congress”.
The post Congress rescues aid budget from Trump’s “evisceration” but climate misses out appeared first on Climate Home News.
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