Saudi Arabia-based ACWA Power is preparing to commit at least $30 billion to China over the next five years, reinforcing a strategic pivot that reflects both confidence in the country’s energy transition and a growing reliance on its industrial ecosystem.
The scale of the planned investment underscores China’s continued gravitational pull in global clean energy. As the world’s largest energy consumer and a dominant force in renewable manufacturing, China remains central not only as a deployment market but as a supply chain backbone for international developers.
Saleh Khabti, president of ACWA Power China, framed the move as a long-term positioning strategy rather than a short-term market play. Speaking at the China Development Forum 2026, he pointed to China’s policy continuity and industrial depth as key investment drivers, particularly in renewable power, desalination, and hydrogen.
ACWA’s exposure to China extends far beyond project pipelines. According to Khabti, more than 99 percent of the company’s power-sector equipment is sourced from Chinese manufacturers. This figure highlights a structural reality: even global developers with diversified portfolios are deeply embedded in China-centric supply chains.
This reliance is not purely cost-driven. China’s manufacturing scale, engineering capabilities, and vertically integrated supply chains have enabled rapid cost compression in solar, wind, and increasingly battery storage systems. For ACWA, this translates into both capital efficiency and accelerated deployment timelines across international projects.
However, such concentration also raises strategic questions. As geopolitical tensions and trade fragmentation reshape global energy markets, heavy dependence on a single supply base introduces exposure to policy shifts, export controls, and pricing volatility.
China’s dual carbon targets, peaking emissions before 2030 and achieving carbon neutrality by 2060, continue to serve as a central organizing framework for investment. These targets, embedded in national planning cycles, provide long-term visibility that remains rare in other major markets.
The forthcoming 15th Five-Year Plan (2026–2030) further elevates hydrogen as a strategic growth sector, reinforcing policy alignment across industrial, energy, and innovation agendas. For ACWA, this policy clarity reduces regulatory uncertainty, particularly in emerging segments such as green hydrogen where project economics remain sensitive to subsidies, offtake frameworks, and infrastructure development.
Khabti indicated that ACWA expects to advance at least one or two hydrogen projects in China, though timelines and scale remain contingent on local partnerships and policy execution.
While wind and solar remain core to ACWA’s China strategy, the company is increasingly targeting adjacent segments that address system-level constraints. Planned investments include battery energy storage systems, pumped hydro storage, offshore wind, and participation in evolving electricity trading markets.
This broader portfolio reflects a shift from capacity expansion to system optimization. As renewable penetration increases, grid stability, flexibility, and market design become critical bottlenecks. China’s rapid deployment of ultra-high-voltage transmission, digitalized grid management, and storage capacity positions it as a testbed for these next-phase solutions.
At the same time, desalination remains a less discussed but strategically relevant pillar. Although China is not traditionally associated with large-scale desalination compared to the Middle East, growing water stress in coastal and industrial regions is creating niche opportunities for integrated water-energy solutions.
Despite broader global concerns around market access and regulatory complexity, China continues to attract foreign capital in energy infrastructure. Industry observers point to the country’s comprehensive industrial base and expanding digital capabilities as key differentiators.
Bai Wenxi of the China Enterprise Capital Union emphasized that China’s combination of market scale, technological innovation, and supply chain completeness remains difficult to replicate. Advances in smart grids and hydrogen technologies are further strengthening its position as a hub for collaborative development.
For ACWA, this translates into a dual advantage: access to a high-growth domestic market and integration into a globally competitive manufacturing ecosystem.
