China’s Contradictory Energy Path: Building Coal While Leading in Renewables
In a striking contradiction at the heart of global energy transition efforts, China is simultaneously driving large-scale expansion of both coal-fired and renewable energy projects. According to Global Energy Monitor (GEM), 104 new coal-fired generator units are scheduled to start operations worldwide in 2026. Remarkably, 85 of them—over 80%—are located in China, representing 55 GW out of 63 GW of global new capacity.
China accounts for 212 GW of the 256 GW of coal-fired power under construction globally, underscoring its central role in the future of fossil fuel energy—even as it leads the world in solar and wind installations.
Global Trends: Coal’s Endurance and Regional Divergence
This wave of construction comes despite mounting global pressure to phase out coal in favor of cleaner alternatives. Outside of China, coal expansion is concentrated in countries such as India (24 GW), Vietnam, and Indonesia. However, analysts note that China alone will shape the trajectory of coal usage in the coming decades.
Meanwhile, total global coal consumption—used for electricity and industrial purposes—hit a new high of 8.85 billion tonnes in 2025, according to the International Energy Agency (IEA). This was driven by increased U.S. coal use (partly due to relaxed environmental rules) and slower-than-expected wind power generation in Europe.
The Evolution of Coal’s Role in China
The reality in China is more nuanced than a pure coal resurgence. While China is constructing dozens of new plants, these are being engineered to operate more flexibly—a necessity in a grid increasingly dominated by renewables. Many plants are being retrofitted to serve as back-up for intermittent wind and solar power.
By 2030, Chinese coal plants are projected to run just 47% of the time, equivalent to 4,100 hours per year—down from 4,400 hours in 2025, according to S&P Global Ratings. This trend reflects coal’s changing function: less as a base-load energy source, more as a stabilizer.
Moreover, China is also retiring outdated plants, phasing out about 3 GW of capacity annually between 2021 and 2025.
Renewables Rise: Record Growth in Clean Power
At the same time, China is breaking records in green energy. In just the first nine months of 2025, it installed a staggering 240 GW of solar capacity. This expansion underlines China’s strategic hedging: investing in coal for grid reliability while continuing aggressive renewable growth.
Importantly, coal-fired power generation declined in both China (-1.6%) and India (-3%) in 2025—the first drop since 1973. This may signal the beginning of a long-awaited turning point.
According to the IEA and think tank Ember, renewables overtook coal globally in electricity generation for the first time during the first half of 2025. This shift was driven by rapid solar and wind growth, outpacing electricity demand increases in many markets.
Strategic Implications for Global Stakeholders
The emerging picture is one of asymmetry and transition: emerging markets expand coal capacity to meet urgent energy needs, while mature markets struggle to fully phase it out. But the sheer scale of China’s dual-track strategy—expanding both fossil and clean energy—means its decisions will set the tone for global emissions trajectories.
For strategic planners and investors in Asia and beyond, the takeaway is clear: the energy mix is diversifying, not replacing. Energy resilience, policy incentives, and technological innovation will determine how fast coal is displaced.