China is poised to achieve a groundbreaking milestone with a projected 230GW of wind and solar installations in 2023, surpassing the combined installations of the United States and Europe, according to a report by Wood Mackenzie. The investment in wind and solar projects in China is expected to reach $140 billion for the year.
Alex Whitworth, Vice President and Head of Asia Pacific Power and Renewables Research at Wood Mackenzie, noted China's remarkable progress in reorganizing its entire power sector to support rapid electrification and renewable expansion since announcing its 2060 carbon-neutral target in 2020.
While some global markets are adjusting their renewables targets, China has notably increased its 2025 wind and solar outlook by 43%, equivalent to 380GW, over the past few years. The country redirected substantial investments towards transmission lines, energy storage, flexible backup, and manufacturing to scale up renewables.
China's cost reductions in wind and solar, coupled with the withdrawal of preferential feed-in tariffs in 2022, have resulted in significant government savings in subsidies. The nation has allocated $455 billion in grid investments from 2021 to 2025, a 60% increase from the previous decade.
Key initiatives include long-distance transmission lines exceeding 1000 km, unlocking over 100GW of renewables development in inland China. The country leads in grid-connected energy storage, with capacity doubling from 2020 to reach 67GW in 2023, with plans to expand to 300GW by 2030.
Despite concerns about a coal plant pipeline, China has implemented policies leading to a fleet of more than 100GW of flexible plants designed to burn less coal and support intermittent renewables. Additionally, the nation has introduced new demand-side policies, including higher peak pricing and targets for 50-80GW of Demand Side Management (DSM) or virtual power plants by 2025.
