Road of Renewable Energy Development in China

According to Professor Xu, China is pursuing two approaches to renewable energy development. On the one hand, huge renewable energy bases are being built in the north-west (Gansu, Xinjiang, Ningxia and Qinghai provinces) and north (Inner Mongolia) of China. »These are wind or solar power plants that can supply up to 10 GW renewable energy«, Professor Xu continues. These centralized power generation systems are installed in provinces with rich renewable energy resources. However, they tend to consume less energy themselves, so they supply provinces in the eastern coast area, with high demand. On the other hand, China is focusing on distributed renewable energy, where renewable energy is generated locally and consumed locally. This approach is being pursued particularly in rural areas and industrial zones. The Chinese government programs for this purpose have been set up: »Whole County Rooftop Solar Pilot« and »Solar Energy for Poverty Alleviation«. The first program aims to promote the widespread installation of rooftop solar systems, similar to Germany’s »1000 Roofs Program«. The second is to provide farmers with solar systems that they can install and earn some money from. These two initiatives are promoting distributed renewable energy. Professor Xu: »Improvements in the efficiency of solar panels and grid technologies have made distributed renewable energy generation more economical and accessible.«

High-voltage direct current (HVDC) transmission lines transport the energy

»HVDC lines are used to transport direct current from renewable energy sources generated in resource-rich areas to regions with high energy demand. They can transmit energy over several thousand kilometers distance. At the end of the transmission line, the direct current is converted into alternating current, which is then available to end users«, Professor Xu explains.

Storage approaches

China is the largest supplier of batteries. Is this storage technology also being used to balance the variability of renewables or to supply large consumers to relieve the grid? »China has carried out different kinds of energy storage projects to increase the renewable energy penetration to grid. China has implemented large-scale battery storage projects to stabilize the grid and store excess renewable energy«, Professor Xu explains. In some provinces, he says, storage systems are even mandatory for new renewable energy projects that can store a certain amount of the energy generated. Professor Xu: »In regions such as Inner Mongolia, Gansu and Qinghai, the required storage capacity is typically between 5 and 20 percent of the installed capacity of the power plant. Financial incentives are linked to the proportion of storage capacity installed and its effectiveness in improving grid stability and integrating renewable energy.«

However, the feasibility of relying solely on battery storage has been discussed for two reasons. »The high cost of lithium-ion batteries can make integrated solar storage systems economically unfeasible for many consumers and businesses, especially in regions where there are no subsidies or other government incentives«, explains Professor Xu. In addition, a battery is designed for about 5,000 charge cycles, which translates into a lifetime of less than ten years, depending on the application. This is not matching with the lifespan of solar cells, which is typically 25 to 30 years. Prof Xu: »In the past, there was also a lot of discussion in China about integrated solar and battery projects, but there has been some cooling off recently.« 

According to Professor Xu, China has been developing pumped hydro for larger storage capacities. »Its total capacity reached 50 GW in 2023. It’s expected that it will reach 120 GW in 2030,« Professor Xu continues. But these pumped storage plants have another advantage: unlike batteries, their lifespan is much more compatible with the lifespan of renewable energy generation plants.

But there are other ways to stabilize the grid

As in Germany and Europe, China is trying to encourage consumers to manage their own electricity consumption, i. e. to use electricity when there is usually enough available and to keep their consumption as low as possible at peak times, in order to balance supply and demand. Prof. Xu points to another development in China: Coal-fired power plants are being retrofitted to match their output to demand. Prof Xu: »This is especially true in regions with high renewable energy penetration, such as Inner Mongolia, Gansu and Xinjiang. For example, some coal-fired power plants have been retrofitted to operate at lower minimum loads, such as 30 to 40 percent of their capacity, without compromising their efficiency or lifetime. However, full implementation is still in the pipeline.«

China is also trying to achieve grid stability through other market mechanisms, even as the share of renewables grows. In this context, Prof. Xu points to financial incentives for owners of energy storage systems. For example, they can use their storage systems to participate in the ancillary services market, i. e. frequency regulation (to compensate for fluctuations in grid frequency) or peak shaving. They receive a fee for this. Time-of-use (TOU) pricing is also used. Professor Xu: »In times of high demand, prices are higher; in times of low demand, they are lower«. This approach also applies to energy storage systems: they charge during off-peak hours and discharge during peak hours, allowing owners of these energy storage systems to generate income. In addition, Prof Xu says that capacity markets are being developed in some regions. These involve paying storage system owners to provide reliable power capacity to the grid - regardless of whether the stored energy is actually used.

Looking to the future

Professor Xu highlights the progress China has already made in maintaining grid stability despite the increasing share of renewable energy, but he also explains that there are still several challenges today. Professor Xu: »A key technology for stabilization is grid-forming inverters«. These grid-forming inverters, which have evolved from the concept of virtual synchronous machines (VSMs), can independently maintain grid voltage and frequency, making them essential for grids with high levels of renewable energy.

However, there are still challenges to be overcome in integrating grid-connected inverters. Professor Xu cites grid compatibility as an example, as the integration of these inverters into existing power grids requires careful planning and coordination to ensure their compatibility with existing grid components. In addition, there are regulatory hurdles: »Existing grid policies and regulations do not yet fully support the large-scale deployment of grid-forming inverters, so regulatory adjustments are needed«, Professor Xu continues.There is also the problem of regional differences in the production and use of renewable energy. Prof Xu: »While the northwest of China is home to large centers of solar and wind power generation, the majority of consumers are located on the east coast. To address this imbalance, the transmission infrastructure needs to be continuously upgraded. High voltage direct current transmission plays a central role in this. To increase its economic viability, various renewable energy sources such as solar, wind could be combined«.

And he believes that the storage problem has not yet been solved. There are lithium-ion batteries for storage in the minute-to-hour range and thermal and pumped-storage power plants for storage over days to weeks. But: »There is still no long-term storage solution that can store energy over several months or even over seasonal fluctuations. The development of such long-term storage remains a key challenge for the future stability and efficiency of the power grid«, concludes Prof. Xu.