Rapid cost decrease of renewable energy and storage offers an opportunity to accelerate the decarbonization of China’s power system

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China’s power sector is key to achieving decarbonization targets for China and the rest of the world. The costs for solar photovoltaics, wind, and battery storage have dropped markedly, approximately 65% to 85% since 2010. Those costs are projected to decline further in the near future, bringing new prospects for the widespread penetration of renewables and extensive power-sector decarbonization that previous policy discussions did not foresee. The results of our study show that if cost trends for renewables continue, 62% of China's electricity will come from non-fossil sources by 2030 at a cost that is 11% lower than achieved through a business-as-usual approach. Further, China's power sector can cut half of its 2015 carbon emissions at a cost about 6% lower compared to business-as-usual conditions. An 80% reduction in 2015 carbon emissions is technically feasible as early as 2030, but requires about a 21% higher cost than the business-as-usual approach, for a $21/tCO2 cost of conserved carbon.

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