Chinese Solar PV Explodes in 2023

China installed 217 GW of Solar PV in 2023, which is more than the US installed in its entire history.

The US installed about 33 GW of Solar PV in 2023 which is up from about 21GW in 2022, but the Chinese PV installations were a staggering 216.9 GW eclipsing its record of 87.4 GW from the previous year as seen in the chart below. China’s new wind power capacity was about 58-gigawatts (GW) in 2023, while the US installed about 10GW. This puts China well ahead of its ambitious renewable energy targets, aiming to reach 1,200 GW of solar and wind power capacity by 2030. 

While FERC order 2023 is aimed to reduce the substantial interconnection queue for renewable power in the US, one must wonder how China was able to connect so much non dispatchable power to their electric grid and what issues it created.

How did China manage such a colossal installation of Solar PV?

With a growing economy, China aims to reduce its dependence on imported fossil fuels and enhance energy security by increasing its share of renewable energy sources like solar power.

While many EPC (Engineering, Procurement, and Construction) firms were involved, utilities like PowerChina Huatean Electric Corporation, Shanghai Electric Group Company Limited, and State Grid Corporation of China (SGCC) (through its subsidiaries) built large solar PV projects. The government implemented various policies to support solar development, including feed-in tariffs, subsidies for manufacturing and installation, and streamlined permitting processes. These measures helped reduce costs, attract investments, and create a conducive environment for solar adoption.

China is the world's leading manufacturer of solar panels, accounting for over 80% of global production capacity made by companies like Tongwei Solar, JA Solar, and Longi Solar. The cost of solar panels has significantly declined in recent years, making them a more attractive option for electricity generation compared to traditional fossil fuels or nuclear power. 

China actively utilizes green bonds, debt instruments specifically used to finance environmental projects, to raise funds for renewable energy investments, including solar PV installations. Various financial incentives, such as tax breaks and subsidies, are offered to encourage businesses and individuals to adopt solar power, further stimulating market demand.

Combined, these factors have created a dynamic environment in China that has propelled the rapid growth of its solar PV and wind power sectors. It is clear China will continue playing a leading role in the global transition towards renewable energy.

How did China’s electric grid manage the influx of so much non-dispatchable power in such a short time?

During periods of peak solar generation and low demand, China has sometimes resorted to curtailing, or reducing, the output of solar power plants. Of course, this situation basically puts the cost of power at near zero and although China does not yet have sophisticated power markets like the US or Europe, the government encourages load shifting that uses solar power when it is available. This helps prevent overloading the grid and maintains grid stability. Curtailment is not ideal as it leads to wasted renewable energy, but it leads to creative ways to use solar power locally when it is available. China is exploring ways to implement more targeted curtailment strategies, focusing on less efficient or geographically isolated solar plants while maximizing power generation from more strategically located facilities.

Implementing policies and incentives that encourage consumers and businesses to shift their electricity usage to off-peak hours, such as using appliances during the night or when there is abundant solar power available, can help reduce peak demand and improve grid flexibility. Engaging large industrial consumers in demand response programs allows them to adjust their electricity consumption based on grid conditions.

Like the rest of the world, advanced forecasting and scheduling is improving in China. Utilizing sophisticated weather forecasting models and intelligent scheduling algorithms allows for better prediction of solar power generation and proactive grid management strategies to ensure stability.

China has been building high-voltage long-distance transmission lines to facilitate the transfer of surplus solar power generated in regions with abundant sunshine to areas with higher demand, optimizing resource utilization and balancing supply and demand across the grid. Establishing coordinated grid management mechanisms between different provinces allows for better planning and utilization of available renewable energy resources across a wider geographical area.

China is actively deploying various energy storage technologies, including pumped hydro storage and battery storage systems, to store excess solar energy during peak generation and release it during peak demand periods, ensuring grid stability and mitigating the intermittency of solar power. China leads the world in the manufacture of lithium-ion batteries and is quickly becoming a dominant EV producer and consumer.

China has nearly 50% of the worlds EVs on their roads. In January 2024, China’s National Development and Reform commission released a blueprint for integrating EVs into the electric grid.  State Grid Corporation of China (SGCC) has been piloting Virtual Power Plants (VPPs) that could help match demand to supply. The current Chinese electricity market structure does not fully incentivize VPP participation, but China may find other ways to schedule loads. VPPs require advanced technical solutions, such as smart metering with Advanced Metering Infrastructure (AMI) as well as regulatory clarity and fair pricing for grid services. VPPs are still developing in the US, and it will be interesting to see how China matches power demand to their fast-growing renewable power. 

Read T&D World’s “When Will You Be Part of a Virtual Power Plant?”

It's important to note that China built and connected these massive solar PV systems to their grid without completely understating the grid management strategies, figuring they could start with curtailment and then find better solutions.  Their experience serves as a valuable case study for other countries pursuing similar goals of clean energy transition and grid modernization.