Global Times: How market-oriented reform drives sustainable development of renewable energy generation in China

BEIJING, Oct. 10, 2025 /PRNewswire/ -- A netizen from people.cn asked why, despite its apparent difficulties, local authorities in China have been advancing market-oriented reforms to allow renewable power producers to compete in the grid electricity market, noting that "implementing this policy looks quite difficult — so why is it still being introduced?"

The policy cited by the netizen stems from a notice issued in February, on deepening the pricing reform for electricity generated from renewable energy. The reform aims to build a new power system and promote the sustainable development of renewable energy generation, with key focuses on ensuring that all renewable power enters the electricity market and allowing market forces to determine renewable power pricing. Experts said the new pricing policy may face "short-term pain" while being implemented, but it would ensure "long-term gain."

The "short-term pain" is largely superficial. For renewable energy generators, it means the end of a period of protected returns — the days of "secure stable yields despite droughts and floods" — and signals a shift toward market competition and survival of the fittest. 

Beneath these surface challenges lie deeper, accumulated tensions in the renewable energy sector. China's dedication to sustained green transition has led to rapid growth in renewable energy capacity and driven installed wind and photovoltaic capacity to surpass coal-fired power installations. This has produced inevitable "growing pains": on the manufacturing side, production capacity has temporarily outpaced demand, leading to increased losses; on the application side, difficulties in power consumption and grid integration have become more prominent.

In other words, promoting renewable power requires a more scientific, forward-looking institutional framework. It should be noted that the reform recognizes transitional challenges and introduces an innovative, sustainable pricing mechanism which vows to "refund the difference," in an effort to help enterprises make a smooth transition.

In the long run, the reform will push renewable energy companies from an emphasis on scale toward improved quality — from "producing more" to "producing smarter and better." 

Full market competition will spur firms to seek new demand channels, flexibly deploy energy storage and take other measures to enhance competitiveness. Overall, the reform is expected to improve the efficient allocation of power resources and deliver "long-term gain."

Many recent policies, not just the market-oriented pricing reform for renewable power, share the trait of being "short-term pain, long-term gain."

This "pain in the short term" is universal. Policies are designed to address specific issues. As reform enters deeper waters, policies must be "sensible" and "weighty," inevitably touching upon deeper contradictions and facing more challenges.

Reform is difficult because it requires adjusting interests across multiple stakeholders — as with healthcare reform, which affects hospitals, drug companies, doctors and patients, or efforts to build a new model for the property sector involving local governments, developers and banks. It is hard because public resources such as education, health care and elder care are limited and must be reallocated to promote fairness and reach the widest "common denominator." It is hard because policy must balance multiple goals — economic development, ecological protection and improved livelihoods — and reconcile trade-offs before moving forward.

"Short-term pain" is also relative. Expecting immediate results from a single policy is unrealistic; accumulated effects over time can produce lasting gain.

Take new-energy vehicles (NEVs) as an example. More than a decade ago, when government departments introduced policies to support the development of the NEV industry, many people were concerned about the market prospects. More than a decade later, China's NEV industry has achieved remarkable growth and now leads the world.

Another case is the 10-year fishing ban in the Yangtze River basin. With combined efforts to strengthen protection while stabilizing employment and social security, five years into the ban the river's fisheries have been allowed to recover, aquatic biodiversity has rebounded, and about 145,000 former fishers have transitioned to new employment. If policymakers had hesitated in the face of early difficulties, the current improvements in the river's ecology would not have been possible.

Chinese policymaking emphasizes the big picture and the long run. Pursuing "long-term gain" requires both patience and initiative, while adopting a time perspective and development outlook.

The development of Xiong'an New Area in North China's Hebei Province, as well as the steady, resolute advance of the country's carbon-peaking and carbon-neutrality efforts, shows that long-term vision coupled with concrete action can overcome present obstacles.

However, difficulties should not deter action. Once the right course is identified, work should proceed vigorously and persistently; with steady, long-term effort, tangible results will follow.

China's cumulative installed power generation capacity reached 3.69 billion kilowatts by the end of August, marking a year-on-year increase of 18 percent, according to the National Energy Administration (NEA), Xinhua News Agency reported. 

In the first eight months of 2025, China has witnessed a significant surge in its renewable energy sector. Solar power generation capacity amounted to 1.12 billion kilowatts, up 48.5 percent compared to the same period last year, and wind power generation capacity stood at 580 million kilowatts, rising 22.1 percent year-on-year, according to the NEA data.

SOURCE Global Times