Key Points
- New coal power plants entering operation in China reached the highest first-half year level since 2016, with 10 GW entering operation for every 1 GW retired, despite a policy shift towards tighter control of new project approvals. China commissioned 30 GW of new coal power, up 43% from last year, while retiring only 2.7 GW. Another 25.4 GW started construction.
- Coal power generation rebounded 3.4% year-on-year in H1 2026, reversing the 2025 decline. The rapid expansion of coal power capacity led to worsening oversupply, reflected both in the increase of wasted wind and solar generation and in falling utilisation of coal power plants.
- The rebound was not evidence of a broad return to coal following LNG shipping disruptions in the Strait of Hormuz. China’s combined domestic coal production and imports in fact fell by 1.4% year-on-year in H1 2026, rather than expanding in response to the external energy shock. Growth in clean energy supply and electrification helped offset the fall in oil supply and limit increases in fossil fuel consumption.
- Estimated wind and solar curtailment, including both reported and unreported curtailment, reached 360 TWh in H1 2026, up 49% year-on-year. Had this electricity been absorbed, the additional power supply could have met all demand growth and allowed coal power generation to fall.
- Long-term contracts continue to reserve a substantial share of limited electricity demand for coal power—coal generators in 2026 are still expected to sign annual contracts covering 60-70% of the previous year’s delivered electricity, turning a risk-management instrument into a barrier to renewable integration.
- CREA advises phasing out coal power-specific minimum requirements for medium- and long-term contracts in provinces experiencing renewable curtailment or oversupply to help coal transition from a baseload generator towards a flexible backup role.
8.6 GW newly permitted
New project approvals remained limited, possibly due to tighter scrutiny under recent control policy.
30 GW newly commissioned
Up 43% year-on-year and the highest first-half recorded since 2016.
274 GW in the pipeline
Equivalent to 22% of China’s existing operating coal fleet.
1,998 utilisation hours
Down 3% year-on-year and the lowest first-half year level since 2021.
60-70% guaranteed in long-term contracts
Annual long-term contract floor alone would equal roughly half of China’s total market-based electricity trading volume.
3.4% rebound in coal power generation
Driven by growth in the coal fleet rather than more intensive plant use or Hormuz disruptions.
360 TWh curtailed wind and solar
Enough to meet all of China’s electricity demand growth in H1 2026 and allow coal power generation to fall.
