Wood Mackenzie warns that China's curtailment of renewable energy will present revenue risks over the next decade.
Wood Mackenzie, a consultancy, said that if renewable energy is curtailed to balance China's grid during times of low or high demand it will pose a risk to investor revenues over the next decade.
Wood Mackenzie predicts that solar curtailment rates will average over 5% in 21 provinces within the next decade.
According to the latest data from the National New Energy Consumption Monitoring and Early Warning Center, this is an increase from only 10 provinces that experienced the same level of curtailment from January to August last year.
Grid managers limit the amount of electricity entering the network in order to balance the supply and demand or because grid infrastructure is limited.
The report concluded that the outlook for wind curtailment was not as bleak. It is expected to be higher than 5% in seven provinces within the next decade.
According to data from the Monitoring Center, fourteen provinces experienced this level of reduction in the first eighteen months of 2025.
Sharon Feng, Senior Analyst for the China Power Market at Wood Mackenzie, says that provinces with high curtailment rates may find it difficult to attract investment if a new mechanism is introduced to set power prices. This will involve regional auctions instead of fixed returns.
China's national limit for curtailment of renewables is 10%. This was reduced from 5% last year as it became more difficult to integrate increasing amounts of renewable energy into the grid.
A senior official from the energy administration told a Friday press conference that China's renewable energy goals will be achieved by integrating renewable power generation in the grid for the next five-year plans, 2026-2030.
The official listed strategies such as encouraging direct corporate power purchases, building more transmission lines and promoting virtual plants that coordinate energy resources to a single entity, so the grid could dispatch them more efficiently. Colleen howe reports.
(source: Reuters)