China’s Coal Power Rebounds Despite Record Renewable Energy Growth
An aerial view of the coal fired power plant on November 11, 2021 in Hanchuan, Hubei province, China. (Photo by Getty Images)
China’s electricity generation from coal increased in the first half of 2026 despite record growth in renewable energy, as significant amounts of wind and solar power went unused due to grid constraints and market policies favouring coal, according to a new report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).
The report found that China added 30 gigawatts (GW) of new coal-fired power capacity between January and June 2026, while only 2.7 GW was retired. Coal-fired electricity generation rose by about 3.4 per cent, reversing the decline recorded in 2025.
Researchers attributed the continued expansion of coal to a wave of project approvals that followed widespread electricity shortages in 2021, when high coal prices triggered blackouts and industrial disruptions across nearly 20 provinces. Local governments subsequently accelerated coal plant approvals to strengthen energy security.
According to the report, 274 GW of additional coal capacity—about one-fifth of China’s existing coal fleet—is already under construction or has received permits, suggesting continued reliance on coal for years.
Renewable Energy Underutilised
The report noted that China’s renewable energy capacity continued to expand rapidly and, in theory, produced enough additional electricity to meet rising demand without increasing coal generation.
However, inadequate grid infrastructure and market mechanisms resulted in growing curtailment—the deliberate reduction of available electricity from wind and solar sources.
Researchers estimated that wind and solar curtailment increased by about 50 per cent compared with the same period in 2025, resulting in wasted clean electricity equivalent to Indonesia’s annual electricity consumption.
Although coal accounted for less than half of China’s electricity generation for the first time during the period, rising electricity demand meant coal generation still increased.
Policies Continue to Favour Coal
The report said China’s electricity market continues to provide significant protection for coal-fired power plants.
Coal generators are required to sign long-term supply contracts covering approximately 70 per cent of their previous year’s electricity output, guaranteeing revenue regardless of actual demand.
In addition, China introduced capacity payments in 2026, allowing coal plants to receive payments simply for remaining available to generate electricity, even when they are not operating.
Qi Qin, lead author of the report, warned that while each policy was originally introduced to improve energy security, together they discourage coal plants from reducing output when renewable energy is plentiful.
She described the continued expansion of coal power as a major climate concern, warning that newly built plants would seek decades of operating time, potentially slowing the retirement of older coal facilities and limiting renewable energy integration.
Climate Commitments Face Challenges
The report comes as China has pledged to “reasonably control” both coal-fired power capacity and actual coal generation, while targeting a 17 per cent reduction in carbon intensity between 2026 and 2030 under its latest Five-Year Plan.
China also maintains its long-term commitment to achieving carbon neutrality by 2060.
However, the researchers said implementation at the provincial level remains inconsistent with national climate ambitions.
Recommendations
To reduce renewable energy waste and accelerate the clean energy transition, the report recommends that Chinese authorities:
- Suspend or reduce mandatory coal power contract minimums in provinces experiencing high renewable energy curtailment.
- Halt approvals for new coal-fired power projects and reassess existing permits.
- Expand electricity transmission networks between provinces.
- Increase investment in energy storage and grid flexibility to improve renewable energy integration.
The researchers argued that these measures would enable coal plants to serve primarily as flexible backup generation while allowing wind and solar power to play a larger role in meeting China’s growing electricity demand. (By Matteo Civillini, Climate news)
