Global operating coal capacity grew by 2% in 2023, with China driving two-thirds of new additions, and a small uptick was seen for the first time since 2019 in the rest of the world, according to Global Energy Monitor’s annual survey of the global coal fleet.
But the accelerated growth in coal capacity may be short-lived, as low retirement rates in 2023 that contributed to coal’s rise are expected to pick up speed in the U.S. and Europe, offsetting the blip. Heightened capacity additions would also be tempered if China takes immediate action to ensure it meets its target of shutting down 30 gigawatts (GW) of coal capacity by 2025.
Data in the Global Coal Plant Tracker show that 69.5 GW of coal power capacity came online while 21.1 GW was retired in 2023, resulting in a net annual increase of 48.4 GW for the year and a global total capacity of 2,130 GW. This is the highest net increase in operating coal capacity since 2016.
A surge in new coal plants coming online in China drove this increase — 47.4 GW, or roughly two-thirds of global additions — coupled with new capacity in Indonesia, India, Vietnam, Japan, Bangladesh, Pakistan, South Korea, Greece, and Zimbabwe. In total, 22.1 GW came online and 17.4 GW was retired outside of China, resulting in a 4.7 GW net increase to the operating coal fleet.
Lower retirements in the U.S. and Europe contributed to the coal capacity upswing. At 9.7 GW, the U.S. contributed nearly half of capacity retired in 2023, a drop from the 14.7 GW retired last year and its 21.7 GW record high in 2015.
European Union member states and the United Kingdom represented roughly a quarter of retirements, with the U.K. (3.1 GW), Italy (0.6 GW), and Poland (0.5 GW) leading the region’s retirements for the year.
The trajectory the global coal fleet takes from here depends to an extent on new construction starts — one of the key indicators of growth in the sector — which declined outside of China for the second year in a row and hit a record annual low since data collection began in 2015.
The report shows that construction started on less than 4 GW of new projects outside China in 2023, well below the 16 GW annual average between 2015 and 2022 for the same set of countries. Only seven countries, excluding China, appeared to start construction on new coal units last year: one plant each in India, Laos, Nigeria, Pakistan, and Russia, as well as three plants in Indonesia.
Moreover, no coal plant construction has started in Latin America since 2016, and no coal plant construction has started for member countries within the OECD, Europe, or the Middle East since 2019. In Nigeria, the start of foundation work at the mine-mouth Ugboba power station in 2023 was the first known construction start in Africa since 2019.
But China’s continued coal construction surge in 2023 stands in stark contrast to these global trends and offsets gains from dwindling coal capacity elsewhere.
China’s 70.2 GW of new construction starts in 2023 represents 19 times more than the rest of the world’s 3.7 GW and is the country’s highest annual capacity breaking ground since 2015. The new construction starts in China were also nearly quadruple what they were in 2019 when China hit a nine-year annual low of entirely new builds.
Flora Champenois, Coal Program Director for Global Energy Monitor, said, “Coal’s fortunes this year are an anomaly, as all signs point to reversing course from this accelerated expansion. But countries that have coal plants to retire need to do so more quickly, and countries that have plans for new coal plants must make sure these are never built. Otherwise we can forget about meeting our goals in the Paris Agreement and reaping the benefits that a swift transition to clean energy will bring.”
Qi Qin, China Analyst of Centre for Research on Energy and Clean Air, said, “The recent surge in coal power development in China starkly contrasts with the global trend, putting China’s 2025 climate targets at risk. At this pivotal juncture, it is crucial for China to impose stricter controls on coal power projects and expedite the transition towards renewable energy to realign with its climate commitments.”
Danielle Koh, Policy Analyst at Reclaim Finance: “GEM’s report shows clearly that global coal capacity outside China is moving in the right direction for our climate. But we need to speed up the phaseout. If we are to meet the International Energy Agency’s 2040 phaseout deadline, two coal plants need to close every week. This will not happen without action from policy makers to provide the regulatory frameworks needed, or support from private financial institutions. And at the same time, banks and investors must stop supporting coal expansion or the phaseout will be futile.”
Nicole Figueiredo de Oliveira, Executive Director of Instituto Internacional Arayara: “It’s essential for the decarbonization of economies that we put an end to new coal; so it’s good news to see that this industry has been losing ground in many countries over the past year. However, we know that there is a huge coal lobby in Brazil that has been influential in extending subsidies and public contracts for coal plant concessions, and relaxing laws in order to increase energy production at fossil fuel plants during climate emergencies. President Lula has a unique opportunity to turn Brazil into a climate leader that walks the talk, by announcing that there will be no new coal projects before the next COP.”
Sharif Jamil, Member Secretary of Dhoritri Rokhhay Amra (DHORA) and Coordinator of Waterkeepers Bangladesh: “Bangladesh’s economy has been significantly burdened by capacity payments, fuel costs, and foreign currency exchange fluctuations linked to operating current coal-fired power plants. It’s becoming difficult for Bangladesh to even operate its existing coal plants at full capacity, which is a clear sign that continuing to consider new coal plants, which exacerbate public health issues and disrupt our climate, is imprudent.”
Zakki Amali, Research Manager for Trend Asia: “The energy transition issue in Indonesia is structural; thus, the solutions must be structural as well. The decrease in renewable energy (RE) targets and the increase in coal quotas, along with the addition of new coal-fired power plants (PLTU) in Indonesia, indicate a step backward in the energy transition. The government needs to promptly correct its course in line with the Paris Agreement. Indeed, extraordinary efforts and strong political intervention are necessary for Indonesia if it is to undergo a transition. Without such measures, Indonesia will only be planning for an energy transition failure.”
Sunil Dahiya, South Asia Analyst at the Centre for Research on Energy and Clean Air (CREA): “If India achieves its renewable energy targets by 2030 and simultaneously activates its advanced-stage construction capacity, it will possess ample power generation capability to satisfy escalating demand. Any further investment in coal capacity could potentially initiate a subsequent wave of stranded asset formation within the power sector. Moreover, such investments would divert resources and funding from the trajectory of renewable energy expansion, effectively entrenching India’s dependency on coal. This dependency not only contributes significantly to direct economic loss and climate change but also exacerbates local air pollution, resulting in thousands of premature deaths.”
Azhar Lashari, a representative of the Alliance for Climate Justice and Clean Energy (ACJCE): “In financially strapped Pakistan, locally available lignite reserves of Thar region have assumed a renewed significance amongst the rulers and the authorities concerned in the energy sector. In laying out the plans for the country’s energy security and economic growth, Thar coal is being prioritized on the ground that it is the ‘least-cost’ and ‘indigenous’ resource. Manifestations of the official aspirations of economic growth and energy security can be seen in the under-consideration projects such as expanding coal-mining, building a designated railway track for coal transportation in Thar, establishing a coal gasification plant, and converting existing imported coal-based plants to Thar coal. If ever realized, these projects are destined to circumvent the country’s commitment to reduce its carbon emissions.”
Haneea Isaad, Energy Finance Analyst at IEEFA: “Financing for coal fired power can be seen shrinking away globally, and we can see this manifest in Pakistan too, especially since China’s announcement in 2021 to not fund any new coal projects overseas. No new coal project proposals have come forward since, but on the downside secondary uses of coal such as ‘coal gasification’ for the production of fertilizer and urea seem to be gaining more traction in policy circles.”
Oyku Senlen, Senior Researcher at E3G: “Turkiye insists on planning new coal capacity regardless of economic challenges and social pushback. Despite recent cancellations, Turkiye still accounts for more than two-thirds of the planned coal power capacity in the OECD and EU. The country’s counterparts in the OECD and EU have shown significant progress towards transitioning away from coal and Turkiye should follow their lead and invest in renewable energy instead.”
Jeanette Lim, researcher for Global Energy Monitor: “Coal has historically not played much of a role in Africa’s energy mix, and that tradition is only set to continue. Financiers should turn towards renewables to drive new energy development across the continent and help close the huge gaps in access and affordability.”
Lucy Hummer, researcher at Global Energy Monitor: “Indonesia simply cannot afford to omit any coal-fired power stations, whether tied to particular industries or not, from clean energy transition planning.”
Claire Pitre, researcher for Global Energy Monitor: “The Philippines should capitalize on the country’s momentum away from coal. A robust phase out strategy with concrete retirement targets would send a strong signal that the country is poised to unlock its significant renewables potential, which is among the highest in Southeast Asia and the world.”
Gregor Clark, Project Manager at the Portal Energético para América Latina: “This year can be a defining one for Brazil’s legacy on climate change. Not only can Brazil rid Latin America of plans for new coal, as chair of the G20, Brazil can set an example for other members, who together are responsible for the overwhelming majority of new coal plans globally.”
The report also shows:
- The Group of Seven (G7) major industrial countries accounts for 15% (310 GW) of the world’s operating coal capacity, down from 23% (443 GW) in 2015. With the completion of new units in Japan in 2023, the G7 no longer has any coal in construction but is still home to one proposal in Japan and two in the U.S.
- The Group of Twenty (G20) is home to 92% of the world’s operating coal capacity (1,968 GW) and 88% of the pre-construction coal capacity (336 GW).
- Current G20 chair, Brazil, saw its total pre-construction capacity decrease, but the country still has two projects remaining, the last ones in Latin America.
- China and the ten countries following it account for 95% of the global pre-construction capacity. The remaining 5% is distributed among 21 countries, eleven of which have only one project and are on the brink of achieving the “no new coal” milestone.
- In 2023, the decrease in proposed coal outside of China was tempered by 20.9 GW of entirely new proposals, led by India (11.4 GW), Kazakhstan (4.6 GW), and Indonesia (2.5 GW), as well as 4.1 GW of previously shelved or cancelled capacity considered proposed again.
In addition to Global Energy Monitor, the report’s co-authors are the Centre for Research on Energy and Clean Air, E3G, Reclaim Finance, Sierra Club, Solutions for Our Climate, Kiko Network, Bangladesh Groups, Trend Asia, Alliance for Climate Justice and Clean Energy, Chile Sustentable, POLEN Transiciones Justas, Iniciativa Climática de México, Arayara, Beyond Fossil Fuels and CAN Europe.
Contact
Flora Champenois, Coal Program Director, Global Energy Monitor
Email: [email protected]
About the Global Coal Plant Tracker
The Global Coal Plant Tracker provides information on coal-fired power units from around the world generating 30 megawatts and above. It catalogs every operating coal-fired generating unit, every new unit proposed since 2010, and every unit retired since 2000. The map and underlying data is updated bi-annually, around January and July. Around April and October, partial supplemental releases also cover updates to proposed coal units outside of China.