Targeting the core changes of the 15th Five-Year Plan's electricity reform, unlocking the benefits and pain points of new energy in the next five years!

2025 marks the end of the 14th Five-Year Plan, and China's new energy industry is entering another critical turning point. Data shows that in 2024, China's newly installed wind and solar power capacity exceeded 300 million kilowatts, far exceeding the target set during the 14th Five-Year Plan. To date, the total installed capacity of renewable energy power generation nationwide has exceeded 1.5 billion kilowatts, accounting for over 55%, with photovoltaic power generation reaching 840 million kilowatts and wind power generation exceeding 510 million kilowatts, achieving the 2030 target ahead of schedule. In just five years, China's new energy industry has achieved an unparalleled leap forward globally. However, behind the rapid development, structural difficulties in various aspects such as institutional mechanisms, resource allocation, market transactions, and grid dispatch have also been exposed.

As we are about to enter the 15th Five-Year Plan, new energy power reform is accelerating into deeper waters. It's less about redistribution of benefits and more about a systemic "surgery" that affects the survival of the entire industry. Today, I will focus on the core changes in electricity reform during the 15th Five-Year Plan and unlock the benefits and pain points of new energy development in the next five years with you, discussing the general direction (If you find it helpful, please follow, like, and share it with friends in need. Please point out any mistakes in the comments section).

I. The Biggest Problem of the Power System: Not Power Balance, but "Power Balance"

Let's look at some key data: In 2024, the total electricity consumption of the whole society nationwide was about 9.5 trillion kilowatt-hours, a year-on-year increase of 5.7%; it is expected to exceed 10 trillion kilowatt-hours in 2025, with new energy power generation contributing nearly 30%. However, balancing power generation and consumption in terms of total volume is not difficult; the difficulty lies in the real-time matching of "power"—that is, the instantaneous dynamic matching of supply and demand.

Wind and solar power are essentially energy sources that "depend on the weather." Their volatility, intermittency, and uncontrollability increasingly challenge grid stability. The future power system will face three major tests every day:

Noontime power consumption: Peak photovoltaic power generation causes surplus, frequent "curtailment" and negative electricity prices;

Evening power supply: Peak load and a sharp drop in photovoltaic output, relying on traditional energy to support;

Early peak prevention of high frequency, evening peak prevention of low frequency: Severe system frequency fluctuations, insufficient frequency regulation resources.

In other words, the most critical challenge for China's future power grid is not "whether there is electricity," but "whether the electricity arrives on time, whether it is sufficient, and whether it is stable."

Regarding these issues, you can combine the characteristics of your own new energy products and the future needs for those functions and products. Let's brainstorm and discuss in the comment section. What opportunities are there!

II. Reshaping the Spatial Pattern: "Western Electricity for Western Use" instead of "Western Electricity for Eastern Use"

Since the 14th Five-Year Plan, China has gradually built a provincial power grid system with ultra-high voltage as its backbone. The "Xinjiang electricity transmission," "Western electricity transmission to the East," and various ultra-high voltage transmission channel projects have enabled Inner Mongolia electricity to leave Inner Mongolia, Xinjiang electricity to leave Xinjiang, and Sichuan electricity to leave Sichuan, providing clean power support for manufacturing industries in Southeast coastal areas. However, reality is also undergoing subtle changes:

1) The capacity of the Western electricity transmission to the East channels is approaching saturation;

2) Ultra-high voltage lines require huge investments and have a long return period, with an average investment of 20-30 billion yuan per channel;

3) The National Energy Administration has strongly proposed "Western electricity for Western use," making on-site consumption of industrial supporting facilities a new trend.

Sichuan and Chongqing, Gansu, Inner Mongolia, Xinjiang, and other "resource areas" are accelerating the absorption of industrial transfers, using the integrated "wind and solar power + new energy storage + load" to support local economic development.

Finally, from the perspective of national strategy, I would like to ask everyone, are we currently in a peaceful era? Many people would probably say yes without hesitation. Everyone has heard more or less about the current international situation. Is the outside world chaotic or not? Here, I formally tell everyone that we are not in a peaceful era, but we are fortunate to live in a peaceful and powerful country. A strong power grid means a strong country. I am proud of the people working in the power industry! I also applaud them! Because of you, there are lights in thousands of homes, and because of you, the national fortune continues to rise!

Because of the era we are in, our leaders have a long-term vision, and the term "industrial backup base" seems to be emerging. It refers to the relocation of important industries in our Southeast coastal areas, enterprises related to national development and economic growth, to the Sichuan and Chongqing regions and the western region to create industrial backups. On the one hand, this is to prevent extreme situations, and on the other hand, it is to respond to the "Western electricity for Western use" on-site consumption. It stimulates the economic growth of the western region, leading the west with the east, and achieving common prosperity. It can be said that behind this reverse allocation strategy is China's forward-looking layout to cope with global geopolitical risks and ensure energy security.

 

III. Solving the New Situation of Electricity Reform: Building a New Species of New Energy with "Self-Balance"

The core logic of the 15th Five-Year Plan's electricity reform is to transform new energy from a passively restricted "resource end" into an adjustable, controllable, and tradable "market entity." This means that future power plants must have self-balancing capabilities, namely the integration of "source, grid, load, and storage"; flexibility adjustment capabilities and schedulability will become the core threshold for project implementation; pumped storage + energy storage + virtual power plants + load response and other diversified adjustment methods will become standard configurations.

Electricity reform is not only promoting grid upgrades and electricity price mechanism adjustments, but also a transformation of energy logic. Judging from the current progress of "Document No. 136," various regions are re-evaluating project revenue models in terms of mechanism electricity, competitive bidding, long-term transactions, green certificates, and carbon trading.

New assessment of project revenue models.

At the same time, new energy enterprises should adapt to the reform rhythm of "self-sufficiency and market orientation" and comprehensively improve their investment and research capabilities, trading capabilities, and dispatch response capabilities. In other words, future photovoltaic developers will no longer just sell electricity, but also "sell services," "sell flexibility," and "sell reliability."

 

IV. Intelligence + Multi-Energy Coupling: New Energy Is No Longer "Fighting Alone"

In the later stages of the 14th Five-Year Plan, the central government has clearly proposed the construction of a new power system based on new energy, and its core lies in "integration + intelligence."

Wind, solar, water, fire, nuclear, hydrogen, alcohol, and ammonia will develop in synergy, no longer fighting alone. You can look at China's "five major and six minor two networks" industrial layout in the second half of the year, which I have analyzed for you before.

1) Multi-energy complementary wind, solar, and thermal energy storage can improve evening peak power output guarantee;

2) Coordinated operation of wind, solar, and hydropower can balance seasonal fluctuations;

3) Green hydrogen production + on-site consumption can solve the problem of midday power curtailment;

4) EaaS (Energy as a Service) + virtual power plant + AI predictive scheduling, promoting active and flexible participation in trading and dispatch markets.

Electricity is no longer a "single product", but a "composite service system". Enterprises that master the ability to optimize the system will gain the greatest benefits during the 15th Five-Year Plan.

In closing: The 15th Five-Year Plan marks the starting point for the "second entrepreneurial wave" of new energy.

The 14th Five-Year Plan was an era of wild growth and expansion for new energy, while the 15th Five-Year Plan is an era of transformation for new energy. Shifting from "building fast" to "using well" presents a new test of the strategic capabilities of new energy enterprises. The key benefits of new energy will be concentrated in areas such as regulation capabilities, project configuration, on-site consumption, and market trading, while pain points will be concentrated in policy uncertainty, difficulties in grid coordination, strong electricity price fluctuations, and rapid competitive elimination.

Whoever can seize the business model reconstruction behind "power balance" will stand out in the elimination competition of the 15th Five-Year Plan. Because in the next five years, the competition will not be about scale, but about the system.