China is highlighting a growing problem in the global transition to renewable energy: electricity grids are struggling to absorb rapidly expanding supplies of renewable power.
In the first six months of this year, China discarded about 360 TWh of clean energy. This figure is nearly 50% higher than figures from last year and makes up enough power to meet Mexico’s needs for a whole year.
Renewable energy curtailment occurs when electricity from wind or solar projects is deliberately reduced because the grid cannot accommodate the available supply. The issue is becoming increasingly widespread and highlights why fossil fuels remain important in some power systems despite rapid renewable-energy growth.
China’s difficulties are linked largely to limited transmission capacity and arrangements that prioritize electricity from newly constructed coal plants. Wood Mackenzie analyst Yuan Ren described the country’s curtailment problem as structural rather than a short-term grid bottleneck, suggesting that pressure could persist for years.
The scale of the problem is also affecting investment. Center for Research on Energy and Clean Air and Global Energy Monitor estimate that China curtailed 26.1% of its combined wind and solar generation between January and June, significantly above official figures.
The country’s National Energy Administration also reported curtailment of 8.6% for solar and over 9% for wind during the period.
Growing uncertainty has made it harder for developers to assess whether new renewable projects will remain financially viable, with the situation contributing to a more than 65% drop in new solar installations in the country. Changes to renewable pricing policy have added to investment uncertainty, while coal-fired power generation is expected to rise again after falling for the first time in a decade.
The challenge is spreading internationally. Australia’s renewable energy curtailment increased by 37% during H1 of this year, equivalent to 7% of its solar and wind generation. Japan also rejected about 34% of renewable electricity while India curtailed roughly 14% of solar power in the past few months.
Analysts say faster investment in transmission networks and battery storage will be crucial to reduce wasted renewable power. Solar-plus-storage projects are already gaining attention as developers seek to manage excess generation.
Chile provides a useful example, adding significant battery capacity to its grid last year, with much of it installed alongside solar plants.
Without stronger grids and greater storage capacity, the rapid expansion of renewable energy could increasingly result in wasted electricity, weaker investment incentives and continued dependence on coal and other fossil fuels.
The projects being undertaken by companies like MAX Power Mining Corp. (CSE: MAXX) (OTC: MAXXF) to extract natural hydrogen from the Earth’s crust offer approaches that can provide clean energy that can be stored easily and used only when the need arises, thus reducing waste.
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