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China’s Renewable Power Boom Faces Grid Bottlenecks and Rising Curtailments

China’s record-breaking expansion in renewable energy, especially solar and wind, is being undermined by inadequate grid infrastructure, leading to growing curtailment rates. According to the National Energy Administration (NEA), solar curtailment rose to 5.7% in the first half of 2025 (up from 3% a year earlier), while wind curtailment increased to 6.6% from 3.9%. Curtailment refers to renewable power generated but not delivered due to supply-demand mismatches or grid limitations—especially acute in sparsely populated regions like Xinjiang, Tibet, and Qinghai, where renewable generation far exceeds local demand.

Fitch Ratings notes that renewable installations are growing much faster than grid or energy storage infrastructure, putting pressure on the system. In response, China raised its acceptable curtailment tolerance to 10%, but several western provinces have exceeded that level. This mismatch could deter future investments unless the grid catches up. While grid expansion is underway—such as Ultra-High Voltage (UHV) transmission lines, with over 43 already operational—it takes years to complete. For example, it takes about five years to build a UHV line.

The NEA aims for over 200 GW of annual renewable additions through 2027, but unless regulators accelerate grid upgrades and market reforms, project returns may suffer, leading to a potential investment slowdown despite China's leadership in renewable capacity growth.