China Leads Global Renewables Market, Aiming for Record 230 GW Wind and Solar Installations

Solar and wind additions in main markets

China continues to spearhead the global renewables market, with a projected record-breaking installation of 230 gigawatts (GW) of wind and solar power this year, surpassing the combined installations of the US and Europe. The latest report by Wood Mackenzie titled ‘How China became the global renewables leader’ sheds light on China’s exceptional strides in renewable energy.

The report estimates wind and solar project investment in China to soar to US$140 billion for 2023, underscoring the nation’s substantial commitment to clean energy initiatives.

Alex Whitworth, Vice President and Head of Asia Pacific Power and Renewables Research at Wood Mackenzie, emphasized China’s proactive measures since announcing its 2060 carbon neutrality goal in 2020. He highlighted China’s reorganization of the power sector to facilitate rapid electrification and the extensive expansion of renewables. Despite global uncertainties following COVID-19, China has significantly advanced its renewable energy goals.

China’s strategic focus shifted from direct subsidies to comprehensive government support at the system level. Redirecting investments toward transmission lines, energy storage, flexible backup solutions, and manufacturing, China optimized its renewables landscape. Additionally, the country phased out preferential feed-in tariffs for renewable projects in 2022, resulting in substantial government savings.

The nation has earmarked a remarkable US$455 billion for grid investments between 2021 and 2025, a 60 percent increase from the previous decade. This includes substantial long-distance transmission lines, unlocking over 100 GW of renewable energy development in inland China.

China has also emerged as a leader in grid-connected energy storage, with its capacity doubling from 2020 to reach 67 GW in 2023. Projections suggest expansion to 300 GW by 2030.

Furthermore, governmental initiatives targeting grid flexibility have led to the creation of a fleet of more than 100 GW of flexible plants designed to ramp up and support intermittent renewables. This transition has resulted in a significant reduction in the share of coal in power generation, down by 10 percentage points in the last five years to approximately 55 percent today.

Despite challenges experienced in other markets, China has maintained low solar and wind curtailment rates, significantly improving project economics compared to previous years.

Sharon Feng, a senior power analyst based in Beijing, emphasized China’s dominance in the global solar manufacturing space, boasting over 80 percent of the global supply chain capacity. Factors like falling interest rates, low energy costs, intense price competition among domestic suppliers, and robust government support for Research & Development and manufacturing have collectively contributed to declining costs in China.

The competitive edge facilitated by lower end-user power prices in China, combined with the nation’s mammoth power market, positions China for a potentially historic achievement in transitioning to a high share of intermittent renewables while maintaining stable prices. This momentum cements China’s pivotal role in shaping the global renewable energy landscape.