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Renewable energy
BusinessCompanies

Chinese utilities’ ambitious renewable energy targets raise questions about costs, delivery

  • Uncertainty about whether other infrastructure will be there to support the increased capacity, says Xiamen University’s Lin Boqiang
  • Growth in renewables entails the expansion and upgrade of the national grid, both in terms of hard infrastructure and IT systems

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A target to add 400-500GW of renewable capacity over the next five years by China’s power industry will put the country ahead of its previously stated ambitions, says Xiamen University’s Lin Boqiang. Photo: Xinhua
Eric NgandYujie Xue
China’s six big state-owned power generating groups have set targets that could lift the country’s renewable energy generating capacity by almost half in the next five years, helping to realise its decarbonisation goals ahead of expectations.
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The revelation of the wind, solar and hydropower expansion plans has, however, raised questions about whether and how they will be realised, given a lack of clear policy support for financing the grid enhancement and energy storage facilities needed.

“The uncertainty is not about how much capacity can be installed, but rather whether other infrastructure will be there to support the increased capacity,” said Lin Boqiang, dean of Xiamen University’s China Institute for Studies in Energy Policy. “That is the biggest question.”

The plans are a clear sign that the companies are heeding President Xi Jinping’s call last year for China to hit peak carbon emissions before 2030 and become carbon-neutral by 2060. What is not clear, however, is how the costs of the infrastructure to support the rapid growth of intermittent wind and solar power will be shared among companies, consumers and government.

This growth entails the expansion and upgrade of the national grid, both in terms of hard infrastructure, such as power lines and energy storage facilities, and information technology systems to manage demand, supply and rising inter-regional power trading.

Their combined five-year renewable energy ambitions could see China Huaneng Group, China Datang Corporation, China Huadian Group, China Energy Investment Group, State Power Investment Corporation and China Three Gorges Corporation together add 400 gigawatts (GW) of capacity by 2025, according to their recent disclosures. This amounts to 44.4 per cent of China’s wind, solar and hydro capacity in December.

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