Heaps of new renewable energy are going up in China, but there’s more to an energy transition than hardware
In recent years, China has installed a mind-blowing number of solar farms and hookied them up to big cities with giant electricity transmission lines. But there’s more to an energy transition than just that.
Just this year, China will install much more solar than it was doing just a few years ago and more, in one year, than the US has installed in its history. The growth in capacity will be huge.
But the percentage of China’s electricity which is generated by wind and solar is still expected to grow slowly, by less than 1% a year between 2022 and 2030.
How does exponential growth in new solar lead to just 1% growth in the amount of solar used? Because longstanding issues in China’s power market curtail the impact that new solar or wind power can have.
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Issues include the electricity market and grid’s inability to transfer power between regions even on grids already linked up physically, the under-developed price mechanism for renewable energy, and little support for energy storage.
These issues require policy attention first and foremost, highlighting the ways that the world’s largest energy transition needs more than buckets of hardware. And why continued focus on coal power for “energy security” leads policymakers to overlook fundamental items on the energy transition checklist.
China has not lacked the capacity to generate electricity for years but, even with an overcapacity of coal plants, high-growth regions have struggled to meet growing energy demand.
That isn’t because there isn’t enough power, but because China’s power system isn’t able to deliver it.
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For example, even if they’re linked by transmission cables, transferring power from a province which generates a lot of electricity to a neighbouring province which uses a lot of electricity isn’t possible without clear policy guidance for the electricity market.
Despite an overcapacity of coal plants, an outdated grid with restrictive, inflexible policies that limit regional electricity grids from performing basic electricity transfers can mean that one province sits on wasted power supply while its neighbor’s lights go out.
This hampers coal’s ability to provide electricity across China. Instead of fixing these issues though, authorities are just building more coal power plants.
If they are not resolved, these issues could derail wind and solar’s ability to deliver the world’s biggest energy transition.
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You can install all the solar panels and wind turbines you want. Unless there’s the policy and infrastructure to support them to meet electricity demand, then the the inefficiencies inheritied over from a coal-reliant power system could choke the development of renewables.
One solution is energy storage – things like batteries. But, even for a technology with as much investment appeal as this, basic policy support is necessary.
China’s electricity grid has for decades prioritised fossil fuel energy sources and the factors of this preferential treatment for fossil fuel continue today.
One major factor that blocks the application of energy storage is the power grid’s preferential sou
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