Grid Flexibility among China’s Top Energy Priorities for 2025

As part of China’s 2025 energy agenda, authorities have unveiled a three-year implementation plan to enhance the adjustment capacities of the country’s grid – also known as ‘flexibilisation’. This plan addresses priorities outlined in the 2024 annual energy work conference, which designated the construction of a ‘new energy system’ based on non-fossil fuels as the sector’s most important objective for 2025.

The latest plan aims to better prepare power generation and energy storage facilities in China for a projected annual increase of 200 GWh in renewable energy consumption over the upcoming years. The goals include retrofitting all suitable coal-fired power plants to enable flexible operation by 2027, transitioning them from baseload to load-following and load-balancing roles. The plan also stipulates creating more pumped-storage hydroelectricity capacity, as well as electrochemical and mechanical energy storage plants that could be centrally managed for improved efficiency. Better market mechanisms are needed to incentivise reliable contributions to grid flexibility from both power producers and consumers.

Despite its abundance of solar and wind resources and a world-leading clean energy supply chain, China’s grid infrastructure has not proved flexible enough to effectively manage fluctuations in electricity supply and demand – a common problem with variable renewable energy (VRE) sources. It is estimated that renewable energy curtailment (restriction to prevent grid overload) rose by around one percentage point in 2024 compared to the previous year. Traditional VRE strongholds in northern and western China have seen a significant uptick of curtailment, though this phenomenon has occurred in southern China as well.

In light of this, the task of improving China’s grid flexibility is now more critical than ever. The new plan is the second of nine initiatives announced by the National Development and Reform Commission (NDRC) in July 2024, as part of its sweeping agenda for developing China’s ‘new energy system’. More policy announcements are expected this year regarding VRE transmission and flexibilisation, grid stability improvement, and demand-side response.