China has announced an ambitious five-year plan aimed at transforming its power system, with renewable energy making up half of all electricity generation and ensuring the grid can efficiently integrate and utilize large volumes of green energy.
The strategy, released by the National Development and Reform Commission and the National Energy Administration, targets over 2.8 billion kilowatts of renewable energy being integrated into the national grid by 2030. It also emphasizes expanding charging infrastructure to support more than 110 million electric vehicles, promoting virtual power plants as a key method to manage energy demand, and establishing a unified national electricity market.
This framework marks a significant shift in China’s power development approach. Moving forward, investments will prioritize not only increasing renewable capacities but also improving how these sources—particularly wind and solar—are absorbed and utilized within the system. The emphasis will transition from mere capacity additions to developing an interconnected system that includes renewable energy integration, transmission infrastructure, microgrids, energy storage, and adaptable power loads.
China recently surpassed a total installed capacity of 4 billion kW, a milestone achieved in the first half of this year, a figure expected to reach approximately 4.3 billion kW by year-end, according to a recent industry report. The growth is mainly driven by green energy initiatives, aligning with China’s overarching carbon neutrality goals, which include peaking carbon emissions before 2030 and achieving complete carbon neutrality before 2060.
Under this plan, the country aims to expand the maximum flexible capacity of virtual power plants to over 50 million kW—almost triple last year’s level—and double installed energy storage capacity to 300 million kW. Additionally, vehicle-grid integration will enable a fivefold increase in adjustable charging capacity, reaching 50 million kW.
Virtual power plants, which are considered a crucial emerging business model, utilize digital platforms to coordinate distributed energy resources such as rooftop solar panels, batteries, and electric vehicles, allowing these assets to operate collectively as a flexible power source. This capability can smooth out electricity demand and supply during peak times by dispatching stored energy, reducing load peaks, and enhancing the grid’s ability to accommodate renewable energy sources, said Hu Min, founder and executive director of the Institute for Green Development and Policy.
The plan classifies China’s regions into three tiers based on renewable resources, grid infrastructure, and load demand growth. Tier 1 areas maintain renewable energy utilization rates above 95%. Tier 2 regions aim for over 90%, aligning with the national average target, while Tier 3 regions are expected to reach at least 85 percent. Details about regional classifications are forthcoming.
It also mandates comprehensive monitoring and early warning systems covering project planning, construction, grid connection, and energy absorption for new energy initiatives. Evaluations of local capacities for integrating green power—including energy storage, load management, and grid access—will be integral to project assessments.
A national transmission strategy is also outlined, prioritizing the transfer of renewable energy from northern and western regions to key consumption zones in eastern, central, and southern China, including the Sichuan-Chongqing area. Offshore wind farms and coastal nuclear projects will prioritize proximity to areas of high demand. Over the next five years, the capacity for west-to-east power transmission is targeted to increase by nearly 25 percent, reaching 420 million kW.