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China’s Grid Struggles to Keep Pace with Record Renewable Energy Growth

China's rapid buildout of renewable energy—particularly solar and wind—is facing increasing curtailment issues due to an underdeveloped power grid. According to the National Energy Administration (NEA), solar curtailment rose to 5.7% in H1 2025 (from 3% in 2024), and wind curtailment reached 6.6% (from 3.9%). These figures highlight the gap between the aggressive pace of clean energy capacity additions and the slower expansion of transmission infrastructure and storage solutions.

The mismatch is particularly acute in interior provinces like Tibet, Xinjiang, and Qinghai, which are rich in renewable resources but lack local demand and face long transmission distances to eastern population centers. Despite raising the acceptable curtailment limit to 10%, actual curtailments in these regions have exceeded that, potentially threatening investor interest in future projects.

In 2024, China installed a record 277 GW of solar capacity and added more in May 2025 alone than any other country installed in all of 2024. Yet the power grid has not kept up. State Grid Corp. plans to spend over 650 billion yuan ($90 billion) this year, with Ultra-High Voltage (UHV) lines being a major focus—43 are currently operational. However, new UHV lines take up to five years to build, meaning significant curtailment reductions are unlikely before 2027.

To mitigate waste, the government is pushing transmission projects that directly link renewable plants to power consumers and promoting local data centers in energy-rich but demand-poor regions. The NEA aims for the grid to support over 200 GW of new renewables annually through 2027, but analysts warn that failing to address curtailments could deter investment due to falling returns and power prices.