context: In 2018, the National Energy Administration and the National Development and Reform Commission introduced a 95 percent renewable energy utilisation rate target. Designed to reduce the abandonment of renewable power and guarantee returns for renewable project investments, the policy has been largely effective, with overall utilisation rates for wind (97 percent) and solar (98 percent) in 2023. However, the rapid increase in renewable power capacity has put increasing pressure on grid infrastructure in some provinces, particularly those with centralised solar and wind bases. Relaxing the utilisation rate target will remove constraints on the scale of renewable installations, likely increasing growth rates in the short term.
On 4 June, the NEA (National Energy Administration) issued ‘Notice on new energy consumption work and ensuring high-quality development of new energy’. The Notice aims to accelerate construction of renewable supporting grid projects, advance system regulation capacity and grid-source coordination, give full play to the role of the grid resource allocation platform and improve the renewable power utilisation rate target.
The Notice also includes measures to improve consumption, including a list of grid infrastructure projects to support renewables, and calls for further market reform.
The renewable energy utilisation target will be relaxed from 95 percent to 90 percent. Although utilisation rates have remained high in some areas since 2019, others are facing pressure to meet the target, according to a source from the China Electric Power Planning and Engineering Institute.
For example, in 2023
- wind power utilisation rates in Western Inner Mongolia (93.2 percent) and Qinghai (94.2 percent) were relatively low
- solar power utilisation rates in Tibet (78 percent) and Qinghai (91.4 percent) were relatively low
The above-mentioned person outlined a number of challenges to meeting the renewable energy utilisation target for some regions, including
- a large amount of new energy storage and other regulating resources will need to be built
- the scale of renewable energy and system regulation capacity in various places changes year by year
- the renewable energy construction cycle takes about half a year, but construction of regulation capacity can be slow
- although the construction cycle of new energy storage is matched with renewable energy, the current configuration time is generally 2-4 hours, which cannot meet the long-term regulation needs of places with a high-proportion of renewables
- the renewable energy construction cycle takes about half a year, but construction of regulation capacity can be slow
Relaxing the utilisation rate can provide more room for the development of renewables in areas with good resource conditions, low renewable power costs and high system consumption costs, they add. It can also help prevent a sharp decline in the utilisation rate in the short term.