The National Energy Administration and State Grid have successively released important reports. With the rapid development of new energy power generation, what is the future direction for the electricity market and power grid?
China's new energy sector is advancing at full speed, yet three major challenges - consumption, electricity prices, and technology - remain to be addressed.
Yujian Energy has learned that recently, the National Energy Administration released the "China Power Supply Development Report (2026)". Soon after, on July 2nd, the State Grid released the "Report on Serving the Development of New Energy 2026". The release of these two reports in quick succession points to the same signal - China's new energy is taking over the incremental power generation at an astonishing pace.
The reports show that in 2025, the newly - added new energy power generation nationwide reached 363.4 billion kWh, accounting for 96% of the newly - added total social electricity consumption. That is to say, almost all of last year's newly - added electricity demand in China was met by wind and solar power.
The rapid development of new energy has exceeded many people's expectations. A series of problems have emerged: Can the power grid consume so much electricity? How will electricity prices change after full market entry? Is technology extending the lifespan of the power grid?
02
With an installed capacity of 1.84 billion kilowatts
Consumption is the real challenge
By the end of 2025, the cumulative installed capacity of wind and solar power nationwide reached 1.84 billion kilowatts. What does this mean? It is equivalent to the total installed capacity of 82 Three Gorges Power Stations (calculated based on the national installed capacity). The combined installed capacity of wind and solar power has, for the first time, exceeded that of thermal power.
The proportion of new energy installed capacity in the State Grid has approached 50%. The annual new energy power generation accounts for 22.8% of the total power generation, and at peak output, it accounts for nearly 60% of the electricity load.
However, having installed capacity is one thing, while generating, transmitting, and consuming electricity is another.
New energy depends on natural conditions. Wind power suffers from a lack of wind, and solar power is affected by cloudy days. The wind in Gansu has to travel thousands of kilometers to reach Shandong, and the power grid must be able to receive and transmit it stably. This is why ultra - high voltage (UHV) has become a necessity. In 2025, the State Grid completed and put into operation several UHV DC projects, such as Longdong - Shandong, Ningxia - Hunan, and Hami - Chongqing, increasing the cross - provincial and cross - regional power transmission capacity to 370 million kilowatts. As of now, the State Grid has completed a total of 41 UHV projects, including 22 AC and 19 DC projects, with a total line length that can circle the equator more than once.
However, this is still far from enough. The installation of new energy capacity continues to grow rapidly. In 2025, the newly - added installed capacity of renewable energy nationwide was 452 million kilowatts, a year - on - year increase of 21%, accounting for 83% of all newly - added installed capacity. The construction cycle of the power grid is much longer than that of solar power plants. It often takes three to five years for a UHV project to go from planning to operation.
An even greater challenge lies in the distribution network. The State Grid has set a goal: to meet the needs of connecting more than 60 million kilowatts of new distributed power sources to the grid annually. Distributed solar power is more difficult to manage than centralized power plants, as thousands of households' rooftops are generating electricity, which exponentially increases the difficulty of grid dispatching and control.
The problems on the power generation side have been basically solved - the costs of wind and solar power have become so low that there is no need to talk about subsidies anymore. However, on the grid side, the tough battle has just begun.
02
New energy fully enters the market
How will electricity prices change?
In 2025, the market - based trading volume of new energy in the State Grid exceeded 1 trillion kWh for the first time, accounting for 58% of the total new energy power generation. At the end of the 13th Five - Year Plan period, this proportion was only 24%, more than doubling in five years.
The trading volume of green electricity in the State Grid reached 217.4 billion kWh, a year - on - year increase of 60%. The number of green certificates traded was 230 million. The cumulative trading volume of green electricity nationwide exceeded 328.5 billion kWh. The number of consumer entities participating in green certificate trading nationwide reached 111,000, a year - on - year increase of 87.5%.
Behind these figures lies a fundamental change: New energy is no longer a priority for consumption within the "planned system" but has to compete with thermal and hydropower in the electricity market.
All industrial and commercial users have entered the electricity market. Power supply enterprises provide proxy electricity purchase services for industrial and commercial users who do not directly participate. The annual proxy electricity purchase volume nationwide reached 1.69 trillion kWh. A unified national electricity market has been initially established.
The advantage of marketization is higher efficiency and better resource allocation. However, the problem is also obvious - electricity price fluctuations will increase.
The marginal cost of new energy power generation is extremely low. When there is wind or sunlight, wind and solar power generation is almost cost - free. In the electricity spot market, this will significantly lower the clearing price. However, new energy is unstable. When the wind and sunlight are insufficient, thermal power and energy storage need to step in, and the price will soar.
In 2025, the installed capacity of new energy storage nationwide reached 136 million kilowatts, an 84% increase compared to the end of 2024 and more than 40 times the capacity at the end of the 13th Five - Year Plan period. Energy storage is used to smooth out such fluctuations. However, 136 million kilowatts of energy storage is still a drop in the bucket compared to the 1.84 billion kilowatts of installed wind and solar capacity nationwide.
Yujian Energy believes that for power - using enterprises, the full market entry of new energy means that electricity prices are no longer a fixed number but a real - time fluctuating signal. Enterprises that can flexibly adjust their production schedules can obtain cheaper electricity during off - peak periods. Factories that cannot stop operating 24/7 may have to bear higher electricity costs.
The trading of green electricity and green certificates is also expanding rapidly. Dalian and Shenzhen and other cities have established "dual - carbon" service centers and green electricity and green certificate service centers. Hubei Province has built an integrated "electricity - carbon - finance" service center. Suzhou has established green electricity and green certificate service stations at the city and county levels, with 1.0287 million green certificates traded in 2025.
For enterprises, buying green electricity and green certificates has changed from a "sentiment" to a "necessity" - products exported to Europe and the United States cannot enter the market if their carbon footprints are non - compliant.
03
AI and large - scale models
Are rewriting the operation logic of the power grid
In 2025, the State Grid developed the first 100 - billion - parameter multi - modal large - scale model in the power industry - the Guangming Power Large - scale Model. It has been deployed in 27 provincial power companies, covering more than 600 scenarios such as grid planning, operation, equipment management, and customer service, with a daily call volume of up to one million times.
This is not a gimmick. The complexity of grid dispatching is increasing exponentially. In the past, it was sufficient to dispatch dozens of large - scale thermal power plants. Now, it has to deal with millions of distributed solar power plants, charging piles, and energy storage devices. It is impossible to calculate all these manually.
What can large - scale models do? Simply put, they can predict, judge, and make decisions. For example, they can predict the impact of cloud changes in a certain area on solar power output tomorrow, judge whether a certain line may be overloaded, and decide whether to start energy storage discharge in advance.
In 2025, the State Grid also successfully developed a ±800 kV/8 million kW controllable phase - change converter valve and a high - voltage direct - connected grid - forming energy storage system. These technical terms may be difficult to pronounce, but their significance is straightforward - to make UHV DC power transmission more stable and the energy storage system respond faster.
The significance of technological breakthroughs is not just "having them." It is to ensure that the power grid does not collapse while the installed capacity of new energy continues to grow.
The cost of new energy installation is decreasing, but the cost of grid connection is increasing. In 2025, the national grid investment was 639.5 billion yuan, with more than half of it going to the distribution network. This cost will ultimately be recovered through transmission and distribution tariffs, indirectly affecting electricity costs.
In 2025, the newly - added new energy power generation reached 363.4 billion kWh, accounting for 96% of the newly - added total social electricity consumption. Almost all of China's newly - added electricity demand was met by wind and solar power.
This is an amazing achievement. However, on the other side of the achievement is pressure - Can the carrying capacity of the power grid, the regulatory ability of the market, and the supporting ability of technology keep up with the rapid development of new energy?
The 15th Five - Year Plan period is the decisive period for achieving carbon peak. New energy needs to continue to develop, the power grid needs to continue to be built, and the market needs to continue to be reformed.
Electricity comes from the west, and the story has just begun.
This article is from the WeChat official account "Yujian Energy", author: Zhao Jianan, published by 36Kr with authorization.