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China’s Energy Paradox: Clean Energy Growth vs. Coal Dominance

Despite record-breaking renewable energy additions, China remains heavily dependent on coal-fired power. In 2024, the country approved 66.7 GW of new coal plants and began construction on 94.5 GW, the highest level since 2015. At the same time, 356 GW of wind and solar capacity was added—nearly equal to the total U.S. installed capacity.

Why Coal Persists:

• Long-Term Power Purchase Agreements (PPAs): Favor coal plants, making them financially viable.
• Grid Constraints: High curtailment rates (up to 5.47%) prevent optimal renewable integration.
• Coal Investment Lock-ins: Existing infrastructure and mining investments entrench coal’s role in China’s energy mix.

Challenges & Future Outlook:

• Global Trend vs. China: While global coal capacity (excluding China) declined by 9.2 GW, China accounted for 93% of new coal plant construction.
• Decarbonization Risks: Without policy shifts, China may struggle to meet its 2030 carbon peaking target.

Way Forward:

• Reduce Coal PPAs and shift incentives toward renewables and storage solutions.
• Develop a Robust Spot Market to optimize power generation and integrate variable renewables.
• Accelerate Retirement of Inefficient Coal Plants to align with climate goals.

China’s clean energy expansion is impressive, but unless coal is phased down strategically, it risks stalling the energy transition.