Zhejiang, one of China’s most developed provinces, faces rapidly growing electricity demand, with peak demand rising from 120 GW in 2024 to 135 GW in 2025. Yet, its power system remains dominated by coal and increasingly dependent on imports, while renewables still only play a limited role.
At the same time, redundant reserve requirements, rigid provincial power flows, and uniform coal power dispatch have led to frequent negative prices and weakened the economics of renewables. Against this backdrop, this study quantifies the economic and climate benefits of enhancing coal power portfolio flexibility in a coal-dominated power system, while at the same time ensuring supply security.
Key Findings
- Emissions and cost benefits: Differentiated dispatch could cut Zhejiang’s coal emissions by 11% in 2025 and lower system costs by 2.5% in 2030 (RMB 60-70 billion annually), without the need for adding new large-scale storage.
- Higher renewable penetration: Wind and solar’s share could rise from 8.8% in 2025 to 16.3% in 2030, with no curtailment.
- Coal fleet transformation and reform needs: High-efficiency units can run for over 7,000 hours, while inefficient plants are moved to reserves and backup, marking coal’s shift from a dominant power source to a flexible and regulating resource.
Flexibility improvements in coal-heavy systems should prioritise coal fleet optimisation and transparent scheduling, rather than relying solely on costly storage or unnecessary demand-side measures in non-stress moments. Reforming reserve rules, enabling flexible interprovincial flows, and improving operational transparency are critical next steps.
