For the first time, China has surpassed fossil fuel-based thermal power with more wind and solar capacity, according to the country’s energy regulator. By the end of March, China’s renewable energy capacity reached 1,482 gigawatts, a major milestone. However, this achievement highlights a gap between capacity and actual power generation, raising concerns about the reliability of the energy system.
Despite renewable energy making up more than half of China’s total installed electricity capacity, they accounted for only 22.5% of the nation’s power consumption in the first quarter of the year. Factors like grid limitations, outdated transmission systems, and a lingering reliance on coal have limited the effectiveness of the country’s new wind turbines and solar panels.
China has made impressive strides in renewables, having met its 2030 energy targets six years ahead of schedule. However, this rapid growth has created some challenges, particularly for the energy storage sector. The country’s aggressive push for renewable energy led to a threefold increase in battery capacity between 2020 and 2023. But this overbuilding coincided with geopolitical tensions, as the U.S. imposed tariffs of up to 125% on Chinese energy products, crippling an important export market.
As a result, China now has a surplus of clean energy that cannot be fully utilized. In regions like Gansu and Inner Mongolia, wind and solar farms are producing more electricity than the grid can handle. Energy storage systems, which are required by policy, often remain unused. With profits declining and expansion slowing, even major players like CATL and Sungrow are facing difficulties.
Looking ahead, China’s long-term energy strategy still aims for 100 GW of new energy storage by 2030. But in the short term, 2025 is expected to be a year of significant adjustments as the country works to address these challenges.
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