The nation's total installed power capacity is expected to exceed 3.6 billion kilowatts by the end of the year, as outlined in the NEA's newly released energy work guidelines. China is also advancing efforts to establish a unified national power market, with non-fossil fuel power generation projected to make up around 60 percent of total installed capacity. Additionally, non-fossil energy is anticipated to constitute about 20 percent of total energy consumption.
Industry analysts indicate that while new market-based pricing mechanisms for renewable energy grid connections introduce some uncertainty, the 200 GW target, though moderate, still provides ample opportunities for stakeholders in the renewable energy sector.
"The 200 GW installation goal for this year accounts for just 56 percent of the total wind and solar capacity added in 2024, but it underscores China's continued commitment to renewable energy," noted Zhu Yicong, vice-president of renewables and power research at Rystad Energy.
Zhu also acknowledged concerns raised following the NEA's latest directive requiring renewable energy producers to fully integrate into power markets and adhere to market-based electricity pricing from June. "Although a vast number of renewable projects are either under development or nearing construction across various provinces, uncertainties regarding future financial returns could lead to delays in project implementation," she said.
To enhance the market value of renewable energy and align prices with supply-demand dynamics, the National Development and Reform Commission and the NEA recently issued a notice emphasizing competitive market mechanisms for electricity pricing.
Industry projections suggest that renewable electricity prices could decline under the new pricing system, given the low variable costs associated with sources such as solar power, particularly during peak daylight hours. This price decline could introduce hesitation among investors assessing new projects.
Despite a relatively modest target for new installations this year, the industry sees this as a strategic approach, allowing developers time to adapt to evolving market conditions. "The moderate goal enables market participants to refine sustainable strategies without facing excessive pressure for rapid installation," Zhu added.
Experts recommend that renewable energy developers navigate the transition to market-driven pricing by securing power purchase agreements, integrating battery storage solutions, and optimizing energy output for competitiveness.
China continues to prioritize renewable energy as a fundamental component of its green economy and dual-carbon objectives. In 2024, newly installed renewable capacity accounted for 86 percent of the nation's total new power installations. The cumulative share of renewables in the country's total installed capacity reached a record 56 percent, according to NEA data.
While renewable energy development surges, China's overall energy production is set to maintain steady growth. Coal production will remain stable with some planned expansion, while crude oil output is expected to stay above 200 million metric tons. The country also plans to bolster its oil and gas reserves to enhance energy security.
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