China Surpasses Renewable Energy Target, But Grid Integration Faces Challenges

As of August, China’s wind and solar energy farms reached a combined installed capacity of 1,206 gigawatts (GW), surpassing a target initially set for 2030. According to a new report by the International Energy Agency (IEA), this rapid expansion is only the beginning, with China expected to continue leading a global boom in renewable energy growth over the next six years.

However, integrating this renewable power into the grid poses significant challenges, particularly as China strives to reduce its carbon emissions after 2030.

Global Leader in Renewable Expansion

China is projected to account for 60% of the global growth in renewable capacity between 2022 and 2030, according to the IEA. Worldwide, renewable capacity is expected to grow 2.7 times over this period, driven largely by China’s explosive solar power development. While this progress marks a significant achievement in China’s energy transition, it is expected to place immense pressure on the nation’s already strained power grid.

Long-Distance Transmission: A Key Hurdle

One of the most pressing challenges for China’s renewable energy grid is the geographical mismatch between energy production and consumption. Much of China’s wind and solar capacity is concentrated in the northwest, northeast, and southwest regions, while the highest demand comes from the more populous southern and eastern areas.

To address this, China has invested heavily in ultra-high-voltage (UHV) transmission lines, capable of carrying electricity over vast distances. These UHV lines were originally built for transmitting coal and hydropower but are now essential for integrating wind and solar energy. Between 2021 and 2025, China plans to build 38 UHV lines with a total capacity of 84.5 GW. However, progress has been slower than anticipated, with only 14 projects under development, contributing to wasted renewable energy in some areas.

Grid Flexibility: A Growing Need

As renewable capacity expands, China’s grid will require not only increased capacity but also greater flexibility to handle the intermittent nature of solar and wind energy. Renewable energy is only available when the sun is shining or the wind is blowing, making grid reliability crucial for ensuring a consistent power supply.

Additionally, renewable energy is often generated during off-peak hours. For example, solar energy tends to peak at midday, while electricity demand is highest in the mornings and evenings. This mismatch underscores the need for advanced energy storage solutions, such as large-scale batteries, to store excess renewable power for later use.

China’s continued reliance on coal-fired power plants complicates grid flexibility further. Unlike gas-powered plants, which can ramp up and down quickly, coal plants require significant time to adjust, making it harder to balance supply and demand in real-time.

The Wastage Dilemma

As renewable energy grows, the problem of wastage is expected to worsen, particularly in northern regions where local grids struggle to absorb excess power. In 2023, provinces like Henan, Jiangsu, and Shandong led in rooftop solar installations, yet these regions are also at risk of increased wastage due to distribution network limitations.

According to the IEA, reforms such as improving power markets and trading green energy certificates among provinces could unlock an additional 11% of grid capacity under a more ambitious scenario for achieving net-zero emissions by 2050. These green electricity certificates allow companies and individuals to prove that they’ve used renewable energy, potentially boosting grid efficiency and reducing wastage.

Renewable Generation Growth vs. Demand

Despite China’s impressive renewable energy growth, fossil fuels still dominate the country’s electricity mix. In 2022, wind and solar energy made up only 15.6% of total electricity generation, while coal accounted for 66%. Although wind and solar power production has been growing at an annual rate of 247.5 terawatt-hours (TWh)—enough to power Spain—the rise in overall electricity demand, which is increasing at twice that rate, has outpaced renewable generation.

This imbalance means that even though renewable capacity is expanding rapidly, China’s power grid remains largely dependent on coal. If China’s electricity demand had remained at 2009 levels, renewable energy would have made the grid 80% clean, according to Lauri Myllyvirta, a senior fellow at the Asia Society Policy Institute.

In May 2023, clean energy sources generated 44% of China’s total electricity, pushing coal power’s share to a record low of 53%. The share of wind and solar reached 23%, highlighting the ongoing shift in China’s energy landscape. However, this transition faces significant headwinds, particularly in the form of grid integration and demand growth.

Conclusion

China’s renewable energy boom is reshaping its power landscape, but significant challenges remain. With most of its renewable energy located far from population centers and the grid struggling to absorb and distribute this power effectively, China must focus on strengthening its transmission networks and investing in flexible grid solutions. Additionally, power market reforms and energy storage solutions will be crucial in minimizing wastage and optimizing the benefits of China’s renewable energy surge.

As China continues to build out its renewable capacity, the key question will be whether its grid can keep up with the pace of this transformation and help the country achieve its climate goals.