China is beginning to refine its vast renewables rollout with the aid of a market-based power pricing system designed to channel investment into technologies that match regional needs rather than flood the grid with surplus electricity, Bloomberg reports.

Introduced in June, the framework abandons the uniform tariffs that once rewarded all renewable generation equally, regardless of local demand or grid capacity. While the previous approach enabled China to dominate the global clean energy race, it also created distortions - including curtailment of power from wind and solar farms that lacked sufficient outlets.

In Guangdong, a densely populated export hub on the southern coast, not far from Hong Kong, authorities are steering capital offshore. The province’s first auction under the new rules set rates that allow sea-based wind turbines to compete on par with coal-fired plants, a move analysts say reflects limited land availability and shallow coastal waters well suited to marine wind projects. Payments for new solar installations, by contrast, will be set lower the report adds.

Shandong, south of Beijing, on the other hand, is recalibrating after years of building solar at breakneck speed. The northern coastal province has amassed more than 90 GW of solar capacity, dwarfing its 27.5 GW of wind. That imbalance has produced a glut of midday electricity, with wholesale prices at times slipping into negative territory.

According to Bloomberg, as a result, in its inaugural renewable power auction earlier this month, Shandong allocated 6m megawatt-hours to wind projects against just 1.2m megawatt-hours for solar. Wind operators secured tariffs roughly 40% higher than their solar counterparts.

Officials in Shandong have also chosen not to distinguish between onshore and offshore projects, effectively forcing costlier marine turbine developers to sharpen efficiency if they wish to remain competitive. This will be a major ask in the months and years ahead given the speed at which the offshore sector is moving in China.

The policy shift underlines Beijing’s next challenge: having scaled up renewables faster than any other country, it must now ensure that the power flows to where it is most valuable, underpinning both decarbonisation goals and the stability of China’s grid.