China’s rising demand for renewable energy is putting strain on the power grid

Author: John Kemp, Senior Energy Analyst at Reuters

China’s record deployment of wind and solar capacity has deepened the regional energy imbalance, forcing the country to switch off more and more renewable energy as it exceeds local demand.

New government regulations aim to limit the amount of renewable energy that has to be given up by expanding long-distance transmission links and better coordinating power generation plans across provinces.

Since the end of 2018, China’s total generating capacity has increased by 1.137 billion kilowatts (kW), an average annual growth of 9%, according to the National Bureau of Statistics (NBS).

Thermal power, mainly from coal-fired power plants but also from gas-fired generators, increased by 257 million kW or 4% per year (“Statistical Yearbook of China”, (Department: National Institute of Public Health, 2023)

But most of the capacity additions are coming from what the government calls “new energy sources”—wind farms (277 million kW, 19% per year) and solar generators (517 million kW, 29% per year). The increased penetration of intermittent renewables is making it harder to manage a nationwide transmission system that was already struggling with large regional imbalances between generation and load.

The solution to the problem of variable wind and solar output is to smooth out the variations across a larger number of generators spread over much larger areas of the country, which will require more transmission and better planning.

Long distance transmission

For decades, the country has been characterized by massive west-to-east transfers of electricity from interior areas with surplus generation to huge load centers on the eastern and southern coasts. Ten provincial-level areas in the east and south (Liaoning, Hebei, Beijing, Tianjin, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian, and Guangdong) accounted for 50% of national consumption but only 40% of generation in 2022.

In comparison, six remote and sparsely populated areas in the north and west (Inner Mongolia, Xinjiang, Shanxi, Shaanxi, Gansu and Ningxia) accounted for 18% of consumption but 25% of generation.

Chart Sheet: Regional Electricity Transfers in China

In response, China’s state-owned grid corporation built a network of very high-voltage transmission lines to transmit electricity thousands of kilometers from surplus areas in the west and north to deficit areas in the east and south.

This has made China a world leader in transmitting electricity using very high voltage technology over long distances while minimizing line losses, and is exporting its expertise around the world.

Energy Abundance in Inner Asia

The northern and western areas of China are among the least populated and poorest regions of the country, but are rich in energy resources – traditionally coal, but now increasingly gas and renewable energy sources.

The country’s most important coal deposits are located in the north and west, and this region has become an important center for generating electricity from mines. Some of the electricity is used locally by heavy industry, while the rest is sent to the east and south.

According to NBS data, in 2022, Inner Mongolia, Shanxi, Shaanxi and Xinjiang alone accounted for 81% of coal mining and 25% of all thermal power production.

By a twist of fate, the dry, windy plains and deserts of the north and west are also the best places for giant wind farms and solar parks.

Inner Mongolia, Shanxi, Shaanxi and Xinjiang, along with neighbouring regions of Gansu, Ningxia and Qinghai, accounted for 42% of all wind and solar power output last year.

However, adding so much wind and solar power capacity to a region already dominated by coal-fired power plants risks overwhelming the transmission system.

During periods of peak wind and solar use, there are not enough people and industry in these areas to absorb all the production, and there is not enough long-distance transmission capacity to send the surplus to the east and south.

More Broadcasts and Planning

In 2016, the country’s new energy adoption rate fell to a record low of 84%, prompting the central government to launch a “Clean Energy Uptake Action Plan” to reduce the waste of renewable resources. The plan focused on improvements in local distribution, long-distance transmission between provinces and energy trading to ease constraints on new energy generation.

By 2023, the wind power utilization rate had risen to an impressive 97.3%, while solar power had reached 98%, according to state news agency Xinhua.

However, with the rapid deployment of renewable energy sources, the problem of investment abandonment is returning – in the first five months of 2024, wind power utilization fell to 96.1% and solar power to 96%. The falling utilization prompted a warning from the National Center for New Energy Consumption Monitoring and Early Warning (“Solving Problems and Difficulties of New Energy Consumption,” Xinhua, July 1, 2024).

The response is likely to be similar, with a renewed focus on integrating renewables at the local level and more transmission capacity to transport excess power across provincial boundaries. Over the past two years, central government policy statements have repeatedly focused on the need for better coordination of transmission and generation between provinces.

Creating a truly national system

To emphasize the importance attached to this issue, the Politburo of the Communist Party held a group study session on new energy technologies and energy security on February 29, 2024. The session, attended by top central and regional leaders, included a discussion on enhancing the “network’s ability to integrate, distribute and regulate clean energy.”

President Xi Jinping has stressed the need for “coordinated development of the energy sector” (“Xi Emphasizes the Need for High-Quality Development of New Energy,” CPC International Department, March 2, 2024).

In many ways, China’s long-distance ultra-high-voltage transmission system is a remarkable feat of engineering that is likely to be replicated in other parts of the world as more renewables come online. It has enabled an extraordinary penetration of intermittent renewables, as well as hydroelectric generation, into the national power system while maintaining or improving reliability. As a result, wind and solar power producers accounted for 15% of all generation in the first five months of 2024, up from 7% in the same period in 2019.

In some ways, however, China is still struggling to create a truly integrated nationwide system from fragmented provincial utilities that pursue their own priorities. If the government’s plans to achieve even greater penetration of renewables are to be achieved, much closer linkages and greater coordination will be needed across different types of generators and over much wider areas.

By Zerohedge.com