China Accelerates Grid Spending to Absorb Deluge of Solar Power

(Bloomberg) -- China has boosted spending on its power networks to allow them to absorb more electricity from its world-leading buildout of solar plants. 

Grid investment jumped by about 33% in the first two months of this year, more than double the average increase in 2024, according to data from the National Energy Administration. Total outlays were 43.6 billion yuan ($6 billion) over the period, still below the pace needed for the two state-owned utility giants to meet a target for 820 billion yuan spending for this year.

China is set to again lead the world’s buildout of solar this year, adding more than half of the total, according to BloombergNEF. However, the second-biggest economy has struggled to integrate all that added capacity and often had to limit the amount of solar flowing into its grid — an issue it hopes to address by boosting network investments through State Grid Corp. of China and China Southern Power Grid Co.

Solar builds surged almost 43% in January and February, down from a growth rate of 57% a year earlier, the NEA data showed. The technology accounted for about three-quarters of all new power capacity, with thermal and wind installations below last year’s levels.

Domestic developers are racing to connect smaller rooftop projects before May 31, when a new power trading program starts that could intensify the already fierce competition in the sector.

Installations are in line with industry expectations, with a solar group forecasting a drop in new additions to as little as 215 gigawatts this year, from last year’s record 277 gigawatts. 

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