(Bloomberg) — China has relaxed limits on new installations of solar and wind power even as grids have become strained in some regions from the surge in clean-energy deployments.

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Wind and solar farms in “areas with better resource conditions” can have as much as 10% of their generation curtailed, according to a central government work plan released late Wednesday. The previous curtailment rate was capped at 5%.

The change will allow more renewables to be deployed in places where the grid would have been deemed overcrowded. At the same time, it could pressure the profits of renewable power plants, as they might see more of their generation cut off.

China has seen increased curtailment this year after shattering records for solar and wind installations in 2023. The relaxed caps could allow developments to continue apace in areas where grid congestion is high, benefiting solar equipment manufacturers who have seen their profits crushed by a price war driven by too much production capacity.

The State Council’s action plan for energy saving and carbon reduction in 2024 and 2025 was dated May 23 but released Wednesday. It also calls for more rational deployment of new production capacity for a number of metals including silicon, and said new polysilicon and lithium battery manufacturing capacity must meet higher standards.

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