China's power grid: The gap between expansion and network capacity - challenge in network integration of renewable energies

Energy waste despite records: China's expansion of solar and wind power

China has positioned itself as a global pioneer in the expansion of renewable energies, but faces considerable challenges when integrating these capacities into its national power grid. Despite the record-breaking installations of solar and wind turbines, a significant proportion of the generated green current is settled- so not fed into the network- because the network infrastructure cannot keep up with the rapid expansion. This discrepancy leads to considerable waste of energy and brakes the effective transition to a more sustainable energy system. The Chinese government has recognized this problem and develops various strategies to improve network integration, including massive investments in ultra -high voltage lines, adjustments to the discount quotas and the promotion of energy storage technologies.

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The unprecedented expansion of renewable energies in China

China has experienced an unprecedented expansion of its wind and solar capacities in recent years. The country leads the global development and assembles twice as many capacities as the rest of the world. In the first seven months of 2023 alone, China installed almost 100 gigawatts of new solar capacity and thus exceeded the record of the entire year 2022. By the end of 2023, the installed photovoltaic capacity reached almost 610 gigawatts, with more than a third of which was added this year alone.

The growth dynamics continued in 2024. In the first nine months of the year, 200 gigawatt wind and solar systems have already been installed, with a forecast of a total of 250 to 300 gigawatts for the whole year. This explosive growth clearly exceeds the previous average values ​​of 100 to 130 gigawatts per year between 2020 and 2022. Global Energy Monitor estimates that China could easily reach an installed wind and solar capacity of 1,200 gigawatts by the end of 2024- six years before President XI Jinping.

The ambitions of China in the area of ​​renewable energies are particularly clearly through the planned “mega wind and solar bases”. The first wave of these major projects with a total capacity of 97 gigawatts was announced in 2021 and largely went into operation as planned in 2023. A further 503 gigawatts are planned for the second and third wave, which should go online between 2025 and 2030.

The problem of delegation: waste of renewable energy

Despite these impressive numbers, China faces a fundamental problem: a significant part of the renewable energy generated is not used. This phenomenon is referred to as “delegation” or “curtailment” - a process in which electricity producers are prevented from feeding their generated electricity into the distribution network.

The history of the delegation in China goes back to the mid -2010s. At that time, the discount rates in some provinces achieved 40 to 50 percent, which means that almost half of the potentially generable renewable energy remained unused. In order to counteract this problem, the National Development and Reform Commission (NDRC) and the National Energy Agency (NEA) introduced an upper limit for separations of 5 percent in 2018. This regulation stated that the usage rates of solar and wind power projects in certain Chinese provinces must not fall below 95 percent.

However, the enforcement of this policy had unintentional consequences: it led to strict restrictions on the scope of renewable energy projects, especially in regions with high discount rates. The approval and development of new projects was severely restricted because many projects had difficulty receiving a building permit.

In 2024, a significant change in this policy is emerging. Consider the NEA and the State Grid Corporation of China (SGCC) to increase the permissible discount rate from 5 to 10 percent. This doubling of the permitted discount rate is an admission that the network integration problem continues to exist and cannot be completely resolved in the short term.

Causes of the lack of network integration

The main cause of the lack of integration of renewable energies in China is the geographical discrepancy between production and consumption. The best conditions for wind and solar energy can be found in the northwestern and northern provinces of China, where large solar and wind turbines dominate. However, the majority of electricity demand concentrates in the industrialized metropolitan areas and industrial centers on the east coast - about 70 percent of the electricity in China are in demand in the southeast.

This situation is an enormous challenge because the production facilities are up to 3,000 kilometers from the main consumption centers. Using such large distances, electricity transport without specialized infrastructure is inefficient because the losses are too high. A clear example of this problem is the largest wind farm in the world in Ulanqab (Inner Mongolia). Although parts of this power plant were completed with a capacity of six gigawatts in 2020, in spring 2023 only one wind turbine was connected to the network.

Another structural problem is the imbalance between investments in renewable energy generation and network expansion. While China invests record -breaking sums in the expansion of renewable energies, investments in the power grid remain comparatively low. The network investments in China were largely stable between 2021 to 2023 compared to the period 2018 to 2020 - despite the exponential growth in renewable energies.

In addition, the Chinese electricity market is still very inflexible. Electricity trade beyond provincial borders is hindered by political interests and bureaucratic hurdles, which also makes the efficient distribution of renewable energy more difficult.

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Political measures and investments to solve the problem

The Chinese government has recognized the problem and works on various solutions. A key element is the expansion of the ultra -high voltage network (UHV), which enables the efficient transport of electricity over large distances. China is a leader worldwide in this area and is massively investing in this technology.

The first pilot projects for large-scale wind and solar systems in China's western regions were initiated in the early 2000s. On the one hand, these should electrify local regions in which many households were still without a power supply and on the other hand supply the industrialized southeast.

The two state network operators, State Grid and China Southern Grid, have announced billions of investment goals at record height to improve the network infrastructure. The first high -voltage line from a renewable energy project in northern Ningxia to the province of Hunan in the southeast was started in June 2023. According to expert estimates, the construction of this management could be completed in 2025.

In total, China will invest more than 80 billion euros in the expansion of its power grid in 2024. Although this is a considerable amount, it is not enough to keep up with the rapid expansion of renewable energies. Experts from Agora Energende recommend that investing in the power grid should be adapted to the record -high investments in renewable electricity generation.

Innovative approaches to improved network integration

In addition to the network expansion, China also pursues innovative approaches for better integration of renewable energies. A remarkable approach is the integration of electric vehicles into the power grid. In January 2024, the Chinese government published implementation guidelines to improve the interaction of electric cars and plug-in hybrids with the power grid.

The program provides to establish a national standard system for vehicle network interaction by 2025 and a tariff mechanism for bidirectional shops. By 2030, the controlled bidirectional loading is to be built on a large scale, with the aim of making electric vehicles “dozens of millions of kilowatts of bidirectional flexibility to the regulatory capacity for the electricity system”.

Battery exchange stations that are widespread in China should also contribute to network stability. For example, the electric car manufacturer NIO had already started testing battery exchange stations in 2022 that could feed electricity back into the network.

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The double strategy: coal and renewable energies

A remarkable aspect of Chinese energy policy is that despite the massive expansion of renewable energies, coal power is also further expanded. In 2024, construction work for coal -fired power plants increased to 94.5 gigawatts - the highest level since 2015. In addition, the country approved 66.7 gigawatt new coal -fired power plant capacity, with the permits increasing particularly in the second half of the year.

This parallel strategy raises questions about China's long -term energy transformation. Instead of replacing coal, clean energy is placed on an existing system with fossil fuels, which makes the intended transition to an electricity sector based on renewable energies. More than 75 percent of the newly approved coal -fired power plant capacities in 2024 were financed by coal mining companies or energy groups with coal activities, which increases the dominance of coal even if the market bases do not justify expansion.

Nevertheless, there are also positive developments: the expansion of renewable energies has contributed to reducing the proportion of coal electricity in China in May 2024 at a record low of 53 percent. This indicates that, despite the strategies running in parallel, renewable energies are slowly becoming more important.

China's balancing act: network integration and the way to the green future

The challenges in network integration will not prevent China from continuing to invest massively in renewable energies. According to S&P Global Ratings, the expansion of renewable energies in China continues despite the projected rising discount rates. The analysts expect the operators to "have to go through the pain until the nodes are smoothed in the transition process".

Solutions for the curtailment problem are developed, including further investments in transmission technology and storage solutions, but the implementation will take time. For the operators, this means that they become more selective and that investments in regions have to prioritize with cheaper local electricity guidelines and better supply-demand ratio.

China's experience with the network integration of renewable energies are of global importance. As the world's largest issuer of greenhouse gases and at the same time leading land in the expansion of renewable energies, China's success or failure in the integration of these energies could have a decisive impact on global climate protection efforts.

Bridge the gap

The lack of network integration of renewable energies in China represents a significant challenge for the country's energy transition. Despite impressive progress in the expansion of wind and solar capacities, the problem of reset remains and leads to considerable waste of energy. The geographical discrepancy between energy generation and consumption, insufficient investments in the power grid and an inflexible electricity market are the main causes of this challenge.

The Chinese government recognizes this problem and takes various measures, including massive investments in the ultra -high voltage network, an adaptation of the discount rates and innovative approaches such as the integration of electric vehicles into the power grid. At the same time, the parallel strategy of expanding coal -fired power plants continues, which raises questions about long -term transformation.

The competition between coal and renewable energies is intensified, with electricity generation from wind and solar energy being increasingly restricted, especially in the fourth quarter of 2024. In order to ensure a successful energy transition, China will significantly increase the investments in its power grid and have to make the market more flexible. This is the only way to exploit the full potential of its impressive renewable energy capacities and make an effective contribution to global climate protection.

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