Coal Is Rising in China’s Clean Energy Transition – The Diplomat
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China Power<br>Coal Is Rising in China’s Clean Energy Transition
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China’s energy transition is entering a more complex phase than commonly assumed. While the country is rapidly scaling up renewable energy – China now leads the world in both investment and deployment – coal production and coal power investment are also increasing.
This contradiction reflects a deeper structural reality: China is not moving from coal to renewables in a linear transition. Instead, it is attempting to expand both simultaneously, balancing decarbonization goals with rising electricity demand and system reliability constraints.
China’s renewable expansion has reached unprecedented levels. In 2024, China’s clean energy investment exceeded $625 billion, nearly double the level in 2015. The country also achieved its 2030 wind and solar capacity target six years ahead of schedule. In that year alone, China installed around 360 gigawatts (GW) of wind and solar capacity – more than the rest of the world combined – bringing total installed capacity to 1.4 terawatts (TW), roughly one-third of the global total. Renewables have already surpassed coal in installed capacity and are expected to account for more than half of China’s total power capacity by 2030.
Yet electricity demand is rising just as rapidly. Driven by the growth of artificial intelligence infrastructure, data centers, and broader electrification, China’s total power consumption exceeded 10.4 trillion kWh in 2025 – more than twice that of the U.S. and greater than the combined demand of the EU, Russia, India, and Japan. Demand has more than doubled since 2015 and is expected to continue growing at least 5 percent annually.
This combination – rapid renewable expansion alongside surging demand – has shifted the nature of China’s energy challenge. While renewables now account for around 84 percent of incremental electricity supply, their intermittent and weather-dependent nature makes it difficult to consistently meet peak demand. China’s power shortages in late 2021 and summer 2022, which affected around 60 percent of provinces for nearly two weeks due to extreme weather that reduced hydropower and wind output, exposed these vulnerabilities. In addition, geopolitical uncertainties – from the Russia-Ukraine conflict to the Iran-Israel-U.S. war – have heightened volatility in global energy markets, reinforcing a more cautious approach to the pace of coal phase-down.
Against this backdrop, coal has re-emerged as a critical stabilizing force in China’s power system. This helps explain the relatively cautious policy signals embedded in China’s 15th Five-Year Plan. While the plan reiterates long-term decarbonization commitments — including reducing carbon intensity by 17 percent and raising the share of non-fossil energy to 25 percent by 2030 — it still stops short of setting explicit timelines for coal or oil consumption to peak. This reflects a deliberate effort to preserve flexibility as Chinese policymakers balance energy transition goals with near-term electric system stability.
In practice, China’s coal production has rebounded significantly. After nearly a decade of supply-side reforms that kept output around 4 billion tonnes annually, coal production rose sharply following the 2022 power shortages and has continued to increase, reaching a...