China is on target to reach a record-breaking 230GW of wind and solar installations this year, more than double the number of US and Europe installations combined, according to Wood Mackenzie.
In the analyst’s latest report, “How China became the global renewables leader”, wind and solar project investment for China is expected to reach $140bn for 2023.
Vice president and head of Asia Pacific Power and Renewables research at Wood Mackenzie Alex Whitworth said: “China announced its 2060 carbon neutral target in 2020 and since then has been quietly reorganising the entire power sector to support rapid electrification and expansion of renewables.
“As we came out of COVID-19 lockdowns, it is impressive to see how far ahead China really is.
“While some other markets are moderating renewables targets, China has pushed up its 2025 wind and solar outlook by 43% or 380 GW in just a couple of years.”
Since 2020, to help scale up renewables in the country, Beijing has redirected significant investments towards transmission lines, energy storage, flexible backup and manufacturing.
As costs of wind and solar fell in China, it also withdrew preferential feed-in tariffs for renewables projects in 2022, saving the government hundreds of billions in subsidies.
Beijing has budgeted $455bn in grid investments from 2021-2025, up 60% from the previous decade.
This includes long-distance transmission lines over 1000km long which have unlocked more than 100GW of renewables development in inland China.
The country has become a leader in grid-connected energy storage, with capacity doubling from 2020 to hit 67GW in 2023 and an outlook to expand to 300GW by 2030.
Other government initiatives target grid flexibility.
China has been criticised for a pipeline of over 200GW coal plants under development, but new policies have led to creation of a fleet of more than 100GW of flexible plants which burn less coal and are designed to ramp up to backup intermittent renewables.
Beijing has also released new policies on the demand side such as higher peak pricing and setting targets for 50GW-80GW of Demand Side Management, or virtual power plants, by 2025.