In 2025, as clean energy put China’s CO2 emissions into reverse for the first time and drove down coal power generation, new and reactivated coal power project proposals surged to a record high, while capacity additions that came online reached the highest annual level in a decade. These trends risk locking China into years of coal expansion that doesn’t align with the reality of China’s power demand growth or climate goals.
Today, the Centre for Research on Energy and Clean Air and Global Energy Monitor have published their H2 2025 coal power review that reveals that China’s new and reactivated coal power project proposals broke through a new ceiling and surged to 161 gigawatts (GW) in 2025, a record high. 2025 also saw China commission 78 GW of new coal power capacity, which is more than India’s net coal power additions over a ten-year period from 2015 to 2024, even though India operates the world’s second-largest coal power fleet.
The latter is a legacy from the permitting spree that started in 2022 in response to power shortages the previous year, largely due to insufficient system flexibility. Today, clean energy is already meeting all demand growth in electricity, yet China is finding itself embroiled in years of coal expansion beyond power demand growth and climate requirements. Not only does China’s 2030 Nationally Determined Contribution (NDC) target imply no growth in power sector emissions, but the Recommendations of the 15th Five-Year Plan (FYP) also imply steadily replacing fossil fuels and raising the share of wind and solar in the energy supply.
However, by the end of 2025, a total of 291 GW of coal power capacity remained in China’s pipeline (already permitted or under construction), equivalent to around 23% of today’s operational coal fleet. If these projects are completed without accelerated retirements, China's coal power fleet will face further downward pressure on utilisation rates and deepen overcapacity.
At the same time, China added around 74 GW of new energy storage capacity in 2025, broadly comparable to the coal power commissioned in the same year. This shift toward flexibility-based system resources is steadily reducing coal power’s role in meeting peak demand and balancing the grid, further constraining both its operating space and the investment case for continued coal capacity expansion.
‘The 15th Five-Year Plan period will be a decisive moment for China's energy transition. Policies are increasingly geared toward enabling higher shares of clean electricity and easing system-level constraints on its integration. Yet the transformation of coal power’s role is just as critical — if not more so. Without firm commitment and clear policy signals to guide this shift, the growth of clean energy will increasingly run up against system constraints; and the coal power sector itself risks deeper overcapacity and more stranded assets, creating economic drag and undermining the broader transition’, said Qi Qin, lead author of the report and China Analyst at CREA.
‘With a record year for new coal plant proposals and near record for commissioning, China is building coal capacity far faster than it is using it, pushing utilisation down as wind and solar power surge. The bigger risk is the opportunity cost: every idle coal plant is capital not spent on the truly flexible, clean power system China could be leading the world to build’, emphasised Christine Shearer, Research Analyst at Global Energy Monitor.
Policy recommendations include:
- Set an explicit power-sector emissions peaking target within the 15th Five-Year Plan, providing a binding constraint against further coal power expansion.
- End net growth in coal power capacity at the beginning of the 15th FYP period.
- Introduce a binding cap on coal consumption in the power sector.
- Accelerate retirement of ageing, inefficient or persistently underutilised coal power units, prioritising the closure of plants with high emissions intensity, poor flexibility performance, or declining load factors.
- Reconfigure coal power operation at the fleet level to support system flexibility.
- Reform capacity payment mechanisms to reward flexibility and system value, rather than installed capacity alone.
- Adjust long-term power contracts and market rules to accommodate declining coal utilisation, reducing guaranteed energy volumes for coal power and preventing long-term contracts from crowding out wind and solar generation.
- Strengthen national coordination over coal power planning and investment, limiting local incentives to expand coal capacity.
Contacts
Qi Qin, China Analyst, CREA
Christine Shearer, Research Analyst, Global Energy Monitor
[email protected]
About CREA
The Centre for Research on Energy and Clean Air (CREA) is an independent research organisation focused on revealing the trends, causes, and health impacts, as well as the solutions, to air pollution. CREA was founded in December 2019 in Helsinki and has staff in several Asian and European countries. The organisation’s work is funded through philanthropic grants and revenue from commissioned research.
About GEM
Global Energy Monitor (GEM) develops and shares information on energy projects in support of the worldwide movement for clean energy. By studying the evolving international energy landscape, and creating databases, reports, and interactive tools that enhance understanding, GEM seeks to build an open guide to the world’s energy system.
