On August 3, 2026, China's National Development and Reform Commission (NDRC) and the National Energy Administration jointly released the 15th Five-Year Plan for the Construction of a New Power System, serving as a top-level framework for the country's power sector from 2026 to 2030. This document aligns with the 15th Five-Year Plan for Renewable Energy Development and the overarching requirements for building a new energy system, centering on the integrated coordination of generation, grid, storage, and load to shift the industry from simply adding new renewable capacity to comprehensive, unified planning.
The plan establishes quantitative targets across power generation, grid infrastructure, regulation resources, demand-side management, and market mechanisms, aiming to initially establish a new power system by 2030, with the share of non-fossil fuel electricity generation rising to 50%. The plan addresses key challenges posed by high-penetration renewable integration, including system security, transmission bottlenecks, insufficient regulation resources, and market mechanism gaps. It envisions a clean, low-carbon, secure, and flexible power system that supports wind and solar energy as primary power sources, ensuring energy supply, economic efficiency, and demand-supply coordination.
Supply-Side Targets and Coal Power Transition
On the supply side, the plan mandates that the share of non-fossil fuel electricity generation increase to 50% by 2030, with total installed power capacity reaching 5.4 billion kilowatts. It supports the orderly development of large-scale wind and solar bases, deep-sea offshore wind, and distributed renewables, complemented by clean sources such as hydropower, nuclear, biomass, and solar thermal. Simultaneously, the plan calls for a transformation in the role of coal power, shifting it from a baseload assurance source to a stabilizing and regulating resource through flexibility retrofits, maintaining a backup capacity while adhering to a "build new before discarding old" approach. Regional utilization rate targets for renewables are also set, with the national rate maintained at around 90% to mitigate curtailment from the outset.
Grid Expansion and Transmission Capacity
On the grid front, the plan aims to significantly expand transmission capacity, raising the west-to-east power transmission scale to over 420 million kilowatts by 2030, with multiple new ultra-high-voltage (UHV) direct current corridors planned. Inter-provincial power exchange capacity will increase from 80 million to 120 million kilowatts, while the distribution network's capacity to host distributed renewables will expand from 500 million to 900 million kilowatts. A multi-layered collaborative grid architecture featuring large grids, regional networks, distribution grids, and microgrids will be developed to address both long-distance transmission from northern and western bases and local consumption in central and eastern regions, resolving renewable integration bottlenecks.
Regulation Resources and Demand-Side Flexibility
System regulation resources are quantified, with pumped-storage hydropower target set at 160 million kilowatts and new energy storage capacity at 300 million kilowatts. Demand-side capabilities are emphasized, with peak-shaving capacity expected to reach 5% of maximum load by 2030, virtual power plants capable of regulating up to 50 million kilowatts, and vehicle-to-grid interactive charging aggregating 50 million kilowatts. This approach expands regulation from single-source storage to a diversified mix involving generation, grid, and consumer-side resources, aligning with assessment requirements for reliable output and peak power supply in the renewable energy plan.
Consumer-Side Innovation and Market Mechanisms
The plan promotes electrification, aiming to raise electricity's share of terminal energy consumption to 35%. Industrial parks, data centers, and commercial buildings are encouraged to undergo adjustable load retrofits, fostering microgrids, direct green power supply, and local consumption models. This breaks the traditional "generation follows load" paradigm, enabling "load follows generation" to expand renewable integration space. In terms of market reform, the plan targets a market transaction electricity share of 70% by 2030, with cross-provincial and cross-regional transactions exceeding 2 trillion kilowatt-hours. It aims to refine long-term, spot, and ancillary service markets, advancing capacity compensation and transmission rights mechanisms to support the dual value realization of renewable energy's electricity and capacity, providing market-based price support for reliable output and peak power assessments.
Investment Opportunities Ahead
Looking ahead, we anticipate sustained momentum in grid infrastructure, including UHV AC/DC transmission corridors, regional backbone network upgrades, smart distribution grid retrofits, and microgrid systems. Key beneficiaries include transmission equipment, distribution automation, and grid digitalization providers. Enhanced distribution capacity will unlock distributed solar development, benefiting developers and operators. Flexible regulation resources present opportunities across pumped-storage and new energy storage, coal power flexibility retrofits, gas peaking units, virtual power plants, load aggregation services, and smart charging equipment. Clean power development, including northern and western wind and solar bases, offshore wind, nuclear expansion, and renewable sources with regulation attributes, may see accelerated deployment. We also highlight potential in power capacity markets, trading platforms, load management systems, simulation and dispatch software, and energy digitalization platforms.
Risks include slower-than-expected power market reform, delays in technology progress for new energy systems, setbacks in traditional energy substitution, lagging UHV and storage project construction, and weak profitability of consumer-side flexible resource business models.
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