Exclusive: China’s Power Market Reforms Reshape Strategy for Renewable Developers, PCG Power Chairman Says

The era of rapid expansion in China’s renewable energy sector is giving way to a new phase focused on balancing energy supply with demand amidst significant electricity market reforms. Li Wenxuan, chairman of PCG Power Technology Co. Ltd., noted that the earlier strategy centered on quickly increasing renewable generation capacity on the supply side, while grid management handled consumption. However, new policies now require renewable energy producers to also take responsibility for managing and selling their electricity, shifting attention to both sides of the energy equation. Li described this shift as the future of renewables development in China, emphasizing the need for generators to adapt to a market-driven environment where electricity is traded in real time or potentially curtailed if not matched with demand. [para. 1][para. 2]

China’s top economic planner and energy regulator implemented this change through “Document No. 136” in February, ending the previous system of fixed pricing and guaranteed grid purchases of surplus renewable power. Developers must now sell electricity on the market, which Li calls “historic,” as it creates new business opportunities for private entrants in electricity trading. The power market, he says, has entered its “second half,” where the focus shifts from building supply to effectively selling it and balancing consumption. [para. 3][para. 4]

Despite leading the world in installed solar and wind capacity, China’s grid infrastructure still lags, presenting challenges in absorbing and distributing new renewable generation. The International Energy Agency (IEA) projects that China will add 3,207 gigawatts (GW) of renewable capacity between 2024 and 2030—triple the growth seen over the previous six years—with solar accounting for 80% of this expansion. To address supply-consumption imbalances, China is rapidly developing virtual power plants (VPPs) and large-scale energy storage, aiming to efficiently aggregate and dispatch distributed energy resources like rooftop solar, batteries, and electric vehicles via digital platforms. [para. 5][para. 6][para. 7]

Li stresses that since Document No. 136, developers focused only on supply-side generation risk being marginalized. Instead, structuring long-term power purchase agreements and tailoring supply to customers’ needs will be critical for profitability, especially as spot market prices have declined in many provinces. He sees particular growth potential in sectors like data centers, advanced manufacturing, and industries interested in green hydrogen or methanol production. [para. 8][para. 9][para. 10]

To respond, PCG Power plans to transform from a distributed solar plant operator into a full-stack energy services provider, offering real-time trading, carbon asset management, and AI-driven power matching. It is seeking trading and VPP licenses across seven provinces, including high-demand Guangdong, and exploring a joint venture with a UK renewable firm to bring AI trading algorithms into China’s market. [para. 11][para. 12]

PCG Power’s ambitions are increasingly global. Following a major investment from Singapore’s Temasek Holdings, which now holds 27.07% of the firm, PCG is expanding into New Zealand, Indonesia, and the Middle East. In New Zealand, PCG has launched a 120 MW project pipeline, including partnerships with local construction firms and initiatives targeting commercial users. In Indonesia, PCG will build a 10 MW solar project for an industrial client, while in Oman and Saudi Arabia, it aims to introduce industrial-scale distributed solar in markets dominated by fossil fuels. [para. 13][para. 14][para. 15][para. 16][para. 17]

Li explains that the company exports not just hardware, but the entire value chain—development, engineering, digital control, and operational expertise—drawing on experience from over 300 Chinese projects. PCG provides local training and establishes regional command centers to ensure operations and data transparency meet regulatory and customer needs internationally. Li concludes that emerging markets today face challenges China overcame a decade ago, and PCG is now helping them develop resilient, balanced renewable energy systems. [para. 18][para. 19][para. 20][para. 21]