As the world's largest greenhouse gas emitter and the leading installer of renewable energy, China sits at the center of global climate action. Its efforts to transition away from fossil fuels, particularly coal, are crucial to the success of international climate goals. But as the nation expands its renewable power capacity at an unprecedented rate, a persistent and misleading narrative continues to dominate energy discussions — that local protectionism is the main barrier to renewable energy integration.
This explanation, while convenient, misrepresents the complexities of China's power system and obscures the deeper structural issues that hinder the full use of wind and solar power. Local governments, though influential in certain policy areas, are not the chief cause of curtailment or the decisive force shaping the grid's operation. A deeper, system-wide transformation — not simply local reform — is needed to support China’s clean energy future.
Rethinking the Idea That Provinces Are Blocking Clean Power
The belief that provincial governments act to protect local coal plants over renewables is widespread. This view assumes local authorities aim to maintain coal generation for reasons like employment, tax revenue, or energy independence. It has also been tied to long-standing concerns about provincial trade barriers and limited inter-provincial cooperation in China's broader economy.
However, this interpretation oversimplifies how China's energy system actually functions. While local governments can influence certain projects, they do not control the national grid's operations or hold decisive power over where electricity is dispatched. Most importantly, they cannot stop renewable energy from being imported across provincial borders.
Evidence suggests the opposite of this narrative. Provinces like Zhejiang now rely on imported electricity for up to half their supply, including power transmitted from wind and solar farms in the west via ultra-high-voltage (UHV) lines. Others, like Hunan and Jiangxi, have suffered shortages due to underinvestment — not overprotection of coal plants. These facts point to national coordination issues, not local obstructionism.
Renewable Energy Waste Is a Systemic Challenge Not a Provincial One
Curtailment — the forced reduction of renewable output — has long been a problem in China. At its peak, some areas were wasting up to 40 percent of wind and solar generation due to grid bottlenecks and inflexible operations. While reforms have brought average curtailment down to around 5 percent, data from late 2024 indicates this issue may be returning.
Blaming local governments misses the point. The core problem is that China's grid is still dominated by coal, which provides inflexible baseload power. When demand is low or fluctuates, it is technically and economically easier to curtail renewable output than to shut down and restart coal plants.
Another key factor is the rigid nature of electricity markets. Long-term contracts, which dominate the sector, require generators to predict their output far in advance — something that wind and solar producers cannot do with high accuracy. This system favors coal, which is highly predictable, and disadvantages renewables.
Local Officials Have Limited Control Over Grid Operations
It is also important to recognize that local authorities are not as powerful in the energy sector as some assume. Although they help approve projects and attract investment, they do not direct day-to-day operations of the power grid. Grid companies like State Grid and China Southern Power Grid make those decisions and prioritize cost-effective sources — increasingly wind and solar.
Local governments also have strong incentives to support renewable energy development. Wind and solar projects involve large-scale investments that contribute to GDP growth, which is often a key performance indicator for provincial leaders. The idea that they routinely block renewable integration runs counter to their financial interests.
New Energy Rules Send Mixed Messages to the Market
Recent policy changes further complicate the picture. In early 2024, regulators introduced a coal capacity pricing mechanism that effectively subsidizes coal plants to remain available. This was meant to ensure grid stability but risks prolonging coal's dominance in the energy mix.
Meanwhile, another policy introduced in April requires grid companies to purchase a guaranteed share of renewable electricity, with the remainder traded on the market. But just a month later, the government lowered the renewable utilization target from 95 to 90 percent, relaxing pressure on grid operators to integrate clean energy.
These conflicting signals create uncertainty and may deter aggressive renewable investment or grid reform. While renewables continue to expand in capacity, their share in actual electricity generation remains relatively modest.
Building a Smarter Power System Offers the Best Way Forward
If curtailment were caused primarily by local interests or weak trading arrangements, then the solution would lie in more market-based deals between provinces and energy providers. But this transactional approach fails to address the structural inefficiencies of the grid itself.
A more effective strategy is to implement nationwide economic dispatch, where electricity from all generators is pooled and distributed based on real-time cost and demand. This would eliminate the current reliance on long-term contracts and allow renewables to compete fairly based on actual conditions.
Improving grid flexibility is also essential. Investments in energy storage, better forecasting tools, and dynamic pricing can help the system handle fluctuations in supply and demand. Transparency and data sharing must also be improved to allow for better coordination between provinces and between different types of energy producers.
Why Focusing on the Right Problems Matters for China and the World
Despite having the world's largest renewable capacity, China's electricity mix still relies heavily on coal. Unless the operational model of its power system changes, curtailment could rise well above current levels in the coming years — undermining climate goals at home and abroad.
Pointing fingers at local protectionism distracts from the real issues that need urgent attention. China must now focus on redesigning dispatch rules, reforming electricity markets, and improving grid operations from the top down. These changes, though technically and politically challenging, are far more important than trying to reshape provincial preferences.
By moving beyond myths and tackling the root causes of renewable underutilization, China can create a more flexible, transparent, and climate-friendly power system. In doing so, it will not only secure its own energy future but also provide a model for other nations navigating the renewable transition.