Now, hopes are riding on wind.
There are good reasons for that. Over the past decade, the wind energy sector has grown hundredfold, both in terms of capacity and production: China boasts the highest expansion rate in the world, even during a global slowdown.
And since 2010, China has been the largest wind power producer, as well. It generates more than 153.4 billion kilowatt-hours, making it the third most popular energy source in the country after coal and hydro.
In 2014, China added just more than 23 gigawatts of new capacity, compared favourably with 16 GW in 2003, the most for any country in history, and it has set its sight on doubling capacity to 200 GW by 2020.
“As most of China’s onshore wind resources are secured by domestic developers, more investment opportunity lies in offshore wind development for foreign investors,” said Yiyi Zhou, a senior wind analyst for Bloomberg New Energy Finance in Shanghai.
Still, challenges remain in the sector, and even though industry observers remained pleasantly surprised by China’s growth track record for the past decade, they’re bracing themselves for a slackening of growth next year.
For example, curtailment – meaning suspension of turbine operations because of grid bottlenecks – remains the persistent challenge. China’s national energy administration and the State Grid utility are still working to solve the transmission gridlock and other grid-related issues.
In its most recent report in 2014, the Global Wind Energy Council in Brussels said China has a long road ahead in its plan to reform its grid operation and electricity market to replace any substantial amount of coal being burned in Chinese cities with green energy. The report also cited the lack of flexibility in the system and the absence of a real electricity market where trading takes place as the key barriers for higher penetration of renewable energy in China.
Technology is another challenge as Chinese officials seek to develop wind farms in lower wind zones but closer to the energy-hungry areas along the coast. It is far more complex to connect cables to wind turbines offshore and under the sea to the grid than it is to do so with onshore wind.