Chinas rapid development in renewable energy has been reaffirmed. According to the latest report from Wood Mackenzie, Chinassolarwind and solar power capacity additions this year are expected to reach a record 230GW, three times that of the rest of the world combined. This remarkable achievement underscores Chinas leadership in global renewable energy and its commitment to achieving carbon neutrality by 2060.

The report How China Became the Global Leader in Renewable Energy points out that Chinas newly installed capacity of solar and wind power will far exceed Europes 75GW and the USs 40GW. This achievement is attributed to the Chinese governments direct support for renewable energy projects, particularly in new grid investments, with an estimated investment commitment of $455 billion in this sector between 2021 and 2025. Grid availability is a key limiting factor for renewable energy development in many markets, including the US.

Alex Whitworth, Vice President and Head of Asia Pacific Power and Renewable Energy Research at Wood Mackenzie, stated that since China announced its carbon neutrality target for 2060, the country has been restructuring its entire power sector to support rapid electrification and renewable energy expansion. Notably, China has raised its 2025 wind and solar capacity expectations by 43%, equivalent to 380GW.

The newly installed renewable energy capacity in 2023 is expected to set a record, surpassing the 140.6GW in 2022. Meanwhile, China has also made significant progress in solar curtailment rates, reducing it to 2% in 2022, far below the over 10% in 2020.

Nevertheless, the report also raises questions about whether China can replace fossil fuels with renewable energy. In 2022, China approved 106GW of new coal power capacity, with the governments total coal power capacity under construction at 200GW. This indicates that despite record levels of renewable energy investment this year, it is comparable to Chinas investment in new coal power plants.

Additionally, to support the continued growth of the global solar industry, Chinese companies have made substantial investments in component manufacturing. It is estimated that by 2032, Chinas supply chain alone could meet the global annual demand for solar energy. However, the massive export of these components to Europe has led to an imbalance in supply and demand for solar components in Europe, driving prices of European-made components to historic lows and putting financial pressure on European manufacturers.

Chinas rapid expansion in the renewable energy sector and its impact on the global market are undoubtedly significant contributions to the global energy transition. However, this also poses challenges to the global solar supply chain, requiring international cooperation to address.