Summary
- China is expanding coal power despite record renewable investments to meet energy needs and ensure energy security after 2022’s shortages.
- New coal projects reached 161GW in 2025, with 291GW in the pipeline, potentially leading to underused plants and stranded assets.
- Experts recommend flexible coal plant dispatch and offline reserves to boost renewables, warning the 15th FYP must reset coal’s role.
China is doubling down on building new coal-fired power plants to meet growing energy needs even as it maintains record investments in renewable energy, a study released on Feb 3 shows.
The risk is that China will lock in years of additional polluting coal power and undermine the government’s climate targets without a clear plan to cap coal use for the power sector or to phase out ageing, inefficient or underused plants, said the Centre for Research on Energy and Clean Air (CREA), a Helsinki-based think-tank, and Global Energy Monitor (GEM), a California-based research outfit.
Adding coal power is at odds with China’s renewable energy investments, which have far outpaced that of other nations in recent years.
It installed a record 434 gigawatts (GW) of wind and solar capacity in 2025 and renewable energy accounted for more than 60 per cent of total installed power generation capacity in the country in 2025, according to recent figures from the National Energy Administration.
That is more than half of all global renewable additions for 2025, which British energy think-tank Ember forecast would reach 793 GW for that year.
China is already meeting its annual growth in electricity demand, currently around 4 to 5 per cent a year, through investments in wind, solar, battery storage and grid upgrading. Green energy has helped cut China’s carbon emissions – the nation is the world’s top carbon emitter.
Yet, coal remains central to the government’s overriding need for energy security.
New and reactivated coal power project proposals surged to a record 161GW in 2025, CREA and GEM said. (For comparison, Singapore’s total installed power generation capacity is about 13.2GW.)
In total, 291GW of coal power capacity remained in the development pipeline by the end of 2025. These are plants already permitted or under construction. This is equivalent to around 23 per cent of China’s operational coal fleet, by far the world’s largest.
China’s energy policies and investments are closely watched because the nation is the world’s largest energy consumer and greenhouse gas emitter – it is responsible for about a third of humanity’s planet-warming carbon dioxide (CO2) emissions. It is the largest oil importer and coal producer and consumer, with coal burning the single largest source of CO2, the main greenhouse gas.
Apart from the emissions risk, the 291GW pipeline is also a concern because as more green energy capacity is added, this means more coal plants will be used less of the time and could become what are called stranded assets – underused or uneconomical because they have been eclipsed by cheaper green energy, said Ms Qi Qin, lead author of the report and China analyst at CREA.
“Most of this capacity is highly likely to come online over the next few years,” she told The Straits Times.
If this happens without an eventual credible and orderly coal power phase-down process, the result will be sharply lower utilisation rates and growing overcapacity, she said.
Another problem is that there are government regulations that encourage most coal power units to remain continuously online, even at low output. Doing so can curb the use of renewable energy.
Instead, the report’s authors recommended that part of the coal fleet be put offline as a reserve, allowing a smaller number of coal units to operate at relatively higher and more stable load levels.
This reduces emissions and costs while increasing renewable energy use, they said in the report.
“A large coal power fleet with inflexible dispatching rules risks locking coal into the system and squeezing the operating space for clean energy. Either outcome would weigh on system efficiency and, ultimately, on economic performance,” Ms Qi said.
Climate targets
Adding more coal plants challenges the government’s climate pledge for carbon emissions to peak before 2030 and achieve carbon neutrality by 2060 because it risks delaying the phase-out of coal in the energy system.
So, why is China building so many new coal plants, despite renewable energy meeting all new demand growth?
A severe drought and heatwave in 2022 slashed hydropower output in south-west China, triggering electricity shortages. This spooked provincial governments worried about energy security and led them to approve scores of new coal projects in 2022-2023.
“China is about energy security and reliability first. Decarbonisation is an important goal, but not the only one,” said Mr Tim Buckley, director of Sydney-based think tank Climate Energy Finance (CEF).
“China is also continuing to pursue an aggressive, progressive electrification of everything – meaning electricity demand continues to grow well above total energy growth,” he told ST.
He remains upbeat about China’s energy story.
He said that based on CEF’s assessment, the average coal power plant 2025 in China ran for just 47 per cent of the time, a record low. Coal plants historically used to run at about 70 per cent.
“And if renewable installs can run at anywhere near current rates, and nuclear can pick up to 10GW a year over the coming decade, we will see a plateau and then slow decline in coal power generation, meaning even lower capacity utilisation rates,” he said. China has the world’s second highest number of nuclear plants after the United States, and is expanding its nuclear fleet.
“I remain very confident in China’s progressive energy system transformation,” he said. Even though China added 95GW of new fossil fuel power capacity, most of which was coal, total coal generation power declined. “I expect this trend to continue, progressively,” he added.
Still, much depends on the energy policy settings in China’s upcoming 15th Five-Year Plan, covering 2026 to 2030, to be formally adopted in March, the report’s authors said.
They said that allowing coal power expansion, delayed retirement of plants and misaligned incentives to persist increases structural risks and complicates every step of China’s energy transition.
“Against this backdrop, the 15th FYP represents not merely another planning cycle but a decisive opportunity to reset coal power’s role in line with China’s long-term economic, climate, and energy security objectives,” they said.
David Fogarty is deputy foreign editor at The Straits Times and senior climate writer. He also covers the environment, in areas ranging from biodiversity to plastic pollution.
