China’s Coal Power Generation Falls for First Time in a Decade as Renewables Surge
Beijing, Thursday, 12 February 2026.
In a historic decoupling of energy demand from fossil fuel consumption, China’s coal-fired power generation fell by 1.9% in 2025, the first annual decline in a decade. Despite a robust 5% increase in overall electricity demand, an aggressive expansion of wind and solar capacity allowed non-fossil sources to meet all incremental growth. Wood Mackenzie reports that coal capacity factors have retreated to 48.2%, signaling a structural shift where coal is moving from a baseload provider to a flexibility mechanism. While analysts predict an “undulating plateau” rather than an immediate collapse for coal, this inflection point suggests China’s power sector emissions likely peaked in 2024, fundamentally altering the outlook for global climate targets.
Renewables Fill the Gap
The scale of China’s renewable energy deployment in 2025 was the primary catalyst for this energy transition. While power demand surged by 5%, representing an increase of 494 TWh, the grid was able to absorb this growth without relying on fossil fuels [1]. Instead, a record-breaking addition of 314 GW of solar and 119 GW of wind capacity in 2025 allowed carbon-free sources to meet all incremental demand [2]. This massive rollout contributed to a total drop in coal generation of 113 TWh compared to the previous year [2]. Over the last decade, China’s combined wind and solar capacity has swelled to 1,842 GW, supported by a significant reduction in costs; since 2015, the Levelized Cost of Electricity (LCOE) for utility solar has plummeted by 77%, while onshore wind costs have fallen by 73% [1].
From Baseload to Backup
As renewable penetration deepens, the operational profile of China’s coal fleet is undergoing a fundamental transformation. Coal-fired power capacity factors—a measure of how often plants run at maximum output—have steadily declined from 60% in 2011 to 52% in 2024, dropping further to 48.2% in 2025 [1]. This trend indicates that coal is increasingly functioning as a flexibility provider to balance intermittent renewables rather than as a baseload power source. To support this shift, approximately 600 GW of coal capacity is currently undergoing flexibility retrofits [1]. Looking further ahead, industry projections suggest this utilization rate could contract even more sharply, potentially falling to 32% by 2035 [4].
2026 Outlook and Supply Constraints
Despite the structural decline in generation, domestic coal production remains high to ensure energy security. On February 10, 2026, the China Coal Transportation and Distribution Association (CCTD) reported that domestic output is expected to rise by 0.7% to 4.86 billion tons in 2026 [4]. This slight increase comes as the country prepares for a projected 5.1% drop in coal imports, which are expected to fall to 465 million tons [4]. Supply chains are also facing immediate pressure; on February 3, 2026, Indonesia—a top supplier—halted spot coal exports following government-proposed production cuts, creating expectations of tighter import availability [4].
The ‘Undulating Plateau’
While the 2025 decline is historic, analysts caution that the path to zero emissions will not be a straight line. Sharon Feng, a senior research analyst at Wood Mackenzie, notes that coal generation may settle onto an “undulating plateau” rather than entering a sustained freefall immediately, driven by uncertainties in weather and system resilience [1]. Furthermore, the rapid expansion of the digital economy poses new demand challenges. The aggregate capacity of data centers in China is projected to grow from 38 GW in 2024 to 78 GW by 2030—a massive 105.263% increase that could strain the grid [1]. Nevertheless, the consensus remains that the sector’s carbon emissions likely peaked in 2024, marking a decisive turning point in the global energy landscape [1].