Despite Record Renewable Growth, China Is Still Betting on Coal

China’s coal power output rose in early 2026, fueling concerns that last year’s drop in power-sector emissions may be temporary despite record growth in renewable energy.

Data from China’s National Energy Administration suggests that 2025 marked a turning point in China’s shift away from fossil fuels and toward renewable energy. Installed renewable energy capacity, including wind, solar, biomass and hydro, reached 2,340 gigawatts, accounting for nearly 60 percent of China’s total generating capacity. Combined wind and solar capacity surpassed thermal power capacity for the first time.

The rapid expansion of renewables helped drive the first annual decline in carbon emissions from China’s power sector in more than a decade, according to the Centre for Research on Energy and Clean Air (CREA). The trend appeared to reinforce expectations that China could meet its goal of peaking its carbon emissions before 2030 and achieving carbon neutrality by 2060.

Coal-fired generation, however, rose again during the first four months of this year, pushing power-sector emissions higher, though they remain below 2024 levels. Analysts say the rebound raises questions about whether last year’s decline represents a lasting structural shift.

The resurgence also comes as China continues to rapidly approve and construct new coal-fired power plants.

“The situation is alarming,” Qi Qin, an analyst at CREA, told Inside Climate News, “China has installed enormous amounts of solar and wind capacity, but the question is whether that capacity is being fully utilized.”

For decades, Chinese policymakers have viewed coal as a cornerstone of national energy security. Unlike oil and natural gas, which are more exposed to geopolitical risks and disruptions in global trade, coal is widely regarded by policymakers as a reliable source of electricity that can help stabilize the power system during periods of uncertainty.

Official data show that China produces more than 90 percent of the coal it consumes domestically, while imports account for roughly three-quarters of its oil supply and about 40 percent of its natural gas consumption.

Those concerns have been reinforced by recent disruptions in global energy markets linked to tensions over the Strait of Hormuz. China’s crude oil imports fell about 20 percent year-over-year in April, while natural gas imports declined 12.5 percent, official customs data shows.

Some researchers, however, argue that the energy-security rationale is becoming less convincing as renewable energy expands.

“The arguments to say we need this because of what’s happening with the U.S. attacking Iran, those arguments are just old,“ said Daniel M. Kammen, a professor of energy and climate justice at Johns Hopkins University, “But they keep using them because many political leaders don’t think that renewables are cheaper than fossil energy. “

Research shows that assumption is no longer correct.

A BloombergNEF analysis published last year found that electricity generated by new wind and solar projects is already cheaper than power from newly built coal- and gas-fired plants in almost every market worldwide. The cost advantage is particularly pronounced in China, where the country’s dominance in solar-panel and wind-turbine manufacturing has driven renewable-energy costs sharply down.

Both Kammen and Qin argue that coal’s persistence is driven not only by energy-security concerns but also by political and economic interests.

A worker sprays water on coal at a storage yard in Nanjing, China, on Oct. 31, 2025. Credit: CFOTO/Future Publishing via Getty Images

Coal-producing provinces depend heavily on mining for jobs and tax revenue, giving local governments strong incentives to support the industry. Meanwhile, wealthier coastal provinces often prefer to maintain local generation capacity rather than rely on electricity imported through long-distance transmission networks from western and northern China.

China began construction on 94.5 gigawatts of new coal-fired power capacity in 2024, the highest level since 2015. The construction boom extended into 2025, when roughly 78 gigawatts of new coal-fired capacity were commissioned, also marking largest annual increase in a decade.

The trend continues this year, as the country added another 24 gigawatts of coal power in the first quarter.

Qin said the increase in coal-fired generation is likely driven less by conflict around the Strait of Hormuz than by the rapid addition of new coal plants to the grid.

“It is more likely that China has commissioned too many new coal-fired power plants since 2024,” she said.

Analysts say the surge in coal construction could have long-term implications for China’s energy transition. Many newly built coal plants operate under medium- and long-term power contracts that guarantee a specific level of utilization, creating competition with renewable energy for a limited pool of electricity demand.

“Some say these new coal plants are bei…