Grid bottlenecks slow China's renewable energy expansion

The main cause, according to the report, is the power grid. „Engpässe in Stromnetz bremsen Chinas grüne Energie", the report states. Only about one-fifth of the electricity transported via Chinese ultra-high-voltage lines comes from solar and wind installations; 42 percent comes from coal-fired power plants.

Grid bottlenecks as a brake

The geographical challenge is transporting electricity from the solar and wind farms in the north and northwest of the country to the industrial centers and densely populated metropolitan regions along the eastern and southern coasts. Ultra-high-voltage lines can transmit large quantities of energy over thousands of kilometers with low losses, but the capacities are apparently insufficient.

In addition, new market rules and incentives for the use of coal are reducing the flexibility of the Chinese energy system, according to GEM. This also has to do with the power grid, according to one analysis.

Coal fills the gap

A separate analysis by the Centre for Research on Energy and Clean Air (Crea) also shows that weak wind conditions in the months of March, April, May and June caused electricity generation from coal to rise. In May, a serious mining accident also occurred in the province of Shanxi, prompting authorities to order safety inspections at other mines. Production fell, so that China imported more coal in June.

At the same time, China is massively expanding its battery storage. According to data from the Chinese Energy Storage Association, 23 gigawatt-hours of storage capacity were installed in standalone facilities in the first quarter – an increase of 205 percent compared to the same period the previous year. In the same period, Germany put two gigawatt-hours of new storage capacity into operation, according to the German Solar Industry Association (Bundesverband Solarwirtschaft). According to Xinhua, the boom around artificial intelligence is likely to further accelerate storage expansion in the current five-year plan through 2030.

Storage and expectations

GEM analyst Aiqun Yu puts the development in context: „Letztendlich wird der Erfolg von Chinas Megastandorten bei erneuerbarer Energie nicht an zusätzlichen Gigawatt gemessen, sondern an der Menge an Kohle, die sie aktiv ersetzen." For 2025, Crea recorded the first year-on-year decline in Chinese coal-fired power generation in decades; some experts consider a plateau in coal-fired power generation possible.

China remains the "world champion in the expansion of solar and wind parks", as the report states. „Doch immer öfter geht die dort gewonnene Energie verloren." Experts consider it possible, according to the analysis, that China could reach the target anchored in the five-year plan of raising the share of solar and wind energy in total power capacity to over 50 percent by 2030 as early as this year.

Coal continues to play a dual role in China: the country imports crude oil and uses coal in certain processes to produce chemicals or gas, for example for everyday plastic-based products. The expansion of renewable energies therefore does not necessarily replace total coal demand, but primarily coal-fired power generation.

For its calculations, GEM uses its own datasets and supplements them with government information, energy company reports, and media reports. The current finding shows: pure capacity expansion is not enough as long as transmission networks and market conditions restrict the use of the energy generated.

This brings grid expansion, storage technology, and reform of electricity market rules into focus – alongside further additions of solar installations and wind parks. The report makes clear that China's energy transition is increasingly being measured by infrastructure rather than the sheer number of new installations.