China is on track to install a record-breaking 230GW of wind and solar this year, according to new figures from energy analysts Wood Mackenzie.
Already the globe’s dominant renewable energy powerhouse, China is expected to invest a total of $US140 billion, or around $A210 billion, in new wind and solar projects by the year’s end.
In terms of capacity, 230GW of new wind and solar is expected to have been brought online this year, more than double that seen in the United States and Europe combined.
“China announced its 2060 carbon neutral target in 2020 and since then has been quietly re-organising the entire power sector to support rapid electrification and expansion of renewables,” said Alex Whitworth, vice president and head of Asia Pacific power and renewables research at Wood Mackenzie.
“As we came out of COVID-19 lockdowns this year, it’s impressive to see how far ahead China really is. While some other markets are moderating renewables targets, China has pushed up its 2025 wind and solar outlook by 43% or 380 GW in just a couple of years.”
Interestingly, the scale of investment and deployment has only increased since China withdrew preferential feed-in tariffs for renewable projects in 2022, saving the government hundreds of billions in subsidies without seeming to slow the industry.
Nevertheless, China has still budgeted $US455 billion in grid investments between 2021 and 2025, up 60% from the previous decade, with a plan to build over 1,000 kilometres of long-distance transmission lines that Wood Mackenzie says has helped to unlock more than 100GW of renewables development in inland China.
China has also become a leader in grid-connected energy storage, with capacity doubling from 2020 to hit 67GW in 2023 and expected to expand further to 300GW by 2030. New policies are also targeting between 50GW to 80GW in demand side management or virtual power plants by 2025.
And even though China has been criticised for holding to a pipeline of over 200GW worth of coal-fired power plants, new policies have supported the creation of a fleet of more than 100GW of flexible coal plants which burn less coal, and which are specifically designed to ramp up to backup intermittent renewables.
Even with this in mind, the share of coal in China’s power generation is nevertheless continuing to decline, down 10% in just the last five years to around 55%. A combination of renewables and nuclear has replaced coal.
“China’s end-user power prices are less than half those in Europe or Australia and this supports a strong competitive edge in global trade,” concluded Whitworth.
“The China power market is now larger than that of Europe and the US combined, so if it can succeed in transitioning to a high share of intermittent renewables while maintaining stable prices, that would be an historic achievement.”
