The curbs, known as curtailment, are likely to increase this year and keep growing, the sources said, potentially reducing investor appetite for projects and slowing China’s energy transition.
In 2017, China’s State Grid pledged to keep curtailment rates within 5% by 2020 by prioritising the purchase of renewables over other power sources and building ultra-high voltage (UHV) transmission lines.
While that helped to reduce curtailment from almost 20% in 2016 to 2-3% in 2022, a lower rate than in the United Kingdom, a manager at China’s State Grid said surging solar and wind installations meant that the 5% limit would be a challenge.
Investment in power generation projects increased 30% last year to 967.5 billion yuan ($134.52 billion), far outpacing the 5.4% growth in power transmission projects, data from China’s National Energy Administration (NEA) showed.
Another manager, who oversees renewable investment at a state-owned power generator, said wind and solar containment could even “exceed the red line of 5%” this year. Both managers declined to be named as they are not authorised to speak to media. China, the world’s top greenhouse gas emitter, is forecast to bring wind power to 530 gigawatts (GW) and solar power to 780 GW in 2024, according to industry body China Electricity Council (CEC).
The rapid addition is expected to put China six years ahead of its 2030 installation target of 1,200 GW under its climate commitments.
In 2023, China’s installed solar and wind capacity surged 39% to 1,050.8 GW, official data showed.
“The grid system could see increasing challenges in absorbing renewable power from 2025 onwards as the scale of new installations is just too big,” said Peng Peng, secretary general of the China New Energy Investment and Finance Alliance, referring to the massive solar and wind projects in the deserts of northwestern China.
China aims to build about 450 GW of renewables capacity in the Gobi desert by 2030, of which some 45 GW commenced operation late last year.
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