(Yicai) Aug. 4 -- China has unveiled an ambitious five-year plan to create a new power system, where renewables account for half of all electricity generated and the power grid can absorb and efficiently use vast amounts of green energy.

The blueprint, jointly issued yesterday by the National Development and Reform Commission and the National Energy Administration, aims to enable more than 2.8 billion kilowatts of renewable energy to enter the power system by 2030. It also calls for charging infrastructure that can handle over 110 million electric vehicles, the wider adoption of virtual power plants as a key tool for managing power demand, and the formation of a unified national electricity market.

The plan signals a fundamental change in China's approach to power-system development. Future investment will focus not only on increasing renewable capacity but also on ensuring that wind and solar power can be reliably absorbed and efficiently used. The focus will also no longer lie in installed capacity, shifting instead toward an integrated system that combines new energy absorption, transmission networks, microgrids, energy storage, and flexible power loads.

China became the first country to surpass total installed capacity of 4 billion kW in the six months ended June 30, a figure expected to rise to about 4.3 billion kW for the year, according to a recent report by the China Electricity Council. The expansion is being driven mainly by green energy, as electricity production is central to China’s carbon transition goals. In 2020, the country set the twin targets of achieving peak carbon dioxide emissions by 2030 and carbon neutrality before 2060.

Under the five-year plan, China aims to lift the maximum adjustable capacity of virtual power plants to more than 50 million kW, nearly triple last year’s level, while installed new energy storage capacity will more than double to 300 million kW. The adjustable charging capacity enabled by vehicle-grid integration will surge five-fold to 50 million kW.

Virtual power plants are one of the most important emerging business models in China's power market. Through digital platforms, these systems combine distributed energy resources such as rooftop solar installations, batteries, and EVs, allowing them to operate collectively as a flexible power resource.

Virtual power plants can iron out electricity supply and demand during peak periods by releasing stored energy, said Hu Min, founder and executive director of the Institute for Green Development and Policy. This effectively flattens power load peaks and boosts the system’s ability to absorb renewable energy, Hu noted.

The blueprint groups China’s regions into three tiers based on their renewable resources, grid infrastructure, and load growth. Tier 1 regions keep their renewable energy usage rates above 95 percent. Tier 2 regions, matching the national average target, must stay above 90 percent, while Tier 3 regions have to achieve at least 85 percent. Details of regional classifications have yet to be disclosed.

The plan also mandates a full-cycle monitoring and early warning mechanism covering planning, construction, grid connection, and power absorption for new energy projects. Local green power absorption capacity, supporting energy storage facilities, power load resources, and grid access conditions will all be included in comprehensive evaluations for new projects.

The document also outlines a national electricity transmission strategy in which renewables in northern and western regions supply major usage centers in eastern, central, and southern China, as well as the Sichuan-Chongqing region. Offshore wind power bases and coastal nuclear power projects will prioritize nearby areas. West-to-east power transmission capacity is targeted to increase nearly 25 percent to 420 million kW in the five years.

Editors: Tang Shihua, Martin Kadiev