China is projected to spend approximately $940 billion this year on energy transition initiatives, maintaining its position as the world’s largest investor in alternative energy sources. According to the Global Energy Transition Report released by the China Enterprise Reform and Development Society, the country is shifting its investment strategy to prioritize grid expansion and support infrastructure alongside capacity development.
China’s low-carbon energy infrastructure has expanded significantly. As of the end of 2025, low-carbon sources represented 60.1% of the nation’s installed generation capacity, and China accounted for 63.6% of global new alternative energy capacity additions in that year. Wind and solar installations have grown particularly rapidly, with combined capacity exceeding 2 billion kilowatts by September, having added 170 million kilowatts in the first nine months of the year. Solar capacity reached 1.31 billion kilowatts while wind capacity hit 700 million kilowatts, with respective annual growth rates of 16.5% and 20.4%.
Despite these gains, China’s rapid expansion has created significant challenges. Overcapacity, particularly in solar equipment and electric vehicles, has prompted authorities to reduce subsidies. The country controls more than 80% of global solar panel component production and 70% of wind power equipment manufacturing, which has driven down renewable technology costs substantially while creating competitive pressures throughout the sector.
A critical limitation affecting renewable energy utilization is the variability of wind and solar output. Currently, a substantial portion of generated power cannot be used when demand is insufficient, creating what is termed the curtailment problem. To address this, China is prioritizing grid modernization, with an estimated $140 billion allocated this year for expansion and related infrastructure improvements. The State Grid Corporation of China plans to invest approximately $574 billion through 2030 on grid expansion, representing a 40% increase compared to the preceding five-year period. This infrastructure investment aims to efficiently transmit electricity from remote renewable installations to major consumption centers, addressing a challenge that has emerged following the nation’s substantial renewable capacity buildout over the past decade.
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