Muyi Yang,Xing ZhangandXunpeng Shi

Macroscope | To end power crunches, China must rebuild its electricity grid around clean energy

Finding the right balance between energy security and climate action will not be easy, and starts with building more battery storage and investing in flexible grid technology

However, turning straight back to coal is not the answer – new coal plants should only be pursued when all other short-term options have been exhausted

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People look out at the drought-hit Jialing River near the confluence with the Yangtze River, in Chongqing, on August 17. Water levels on parts of the Yangtze, China’s largest waterway and home to its top hydropower station, dropped to the lowest on record for this time of year, according to state media reports. Photo: Bloomberg

Muyi Yang,Xing ZhangandXunpeng Shi

Published: 11:30am, 14 Sep 2022

China has the fastest-growing clean energy capacity in the world yet faces recurring power shortages. This seeming paradox is really a sign that its clean power transition is approaching a critical tipping point – its entire power system needs to be rebuilt for the energy transition to advance.

After months of record-setting heatwaves, China’s energy planners are facing one of their toughest challenges yet. In the first seven months of the year, they added an incredible 53 gigawatts of wind and solar power capacity across the country, roughly equivalent to India’s total wind and solar capacity build-up since the mid-2010s.

This has helped drive a 22 per cent increase in wind and solar generation this year, reaching 700 terawatt hours (TWh). China now generates more than enough wind and solar energy to power Germany for a year.

But even with these dramatic increases, energy planners are still looking at a power shortage that could slow not only China’s energy transition but also the global manufacturing industry.

Meanwhile, coal still powers roughly 60 per cent of the nation’s energy, generating about 5,000 TWh last year. With expectations for a rapid increase in electricity demand in the next couple of years, China’s coal use may continue to expand until close to 2030.