China’s renewable energy outpaces coal
China’s renewable energy outpaces coal
For the first time since 2015, coal-fired power generation across China did not increase to help meet the country’s increasing power demand, according to Wood Mackenzie.In 2025, China's coal-fired power generation decreased 1.9% despite the country’s power demand rising 5%, according to Wood Mackenzie. The incremental demand was met by carbon-free generation, supported by China’s rapid growth in renewables and development of nuclear and hydro capacity.Wood Mackenzie senior research analyst Sharon Feng said unprecedented expansion in renewable energy capacity was at the heart of this transformation.“China’s wind and solar capacity had risen more than ten-fold to 1842GW over the past decade,” she said.Since 2015, the levelised costs of energy for utility solar and onshore wind in China have dropped by 77% and 73%, making renewable energy competitive with fossil fuels.“This economic shift has unleashed massive investment, with investors and developers racing to capture market share,” Ms Feng said.Beyond renewables, China has seen nuclear capacity expand from 27GW in 2015 to 62GW at present, which, combined with hydro now provides 445GW.Also notable is China's massive investment in power transmission infrastructure. The country has deployed 340GW of inter-regional power transmission corridors, connecting remote renewable resources in the west and north to population and industrial centres in the east and south, which Wood Mackenzie says is critical to unlocking renewable potential that would otherwise be stranded in sparsely populated western China and bringing it to central and coastal load centres.Coal’s changing roleAccording to Wood Mackenzie, coal-fired power capacity factors across China were as high as 60% in 2011, then declined to 52% in 2024 and 48.2% in 2025. Wood Mackenzie expects the utilisation to further decline to 32% by 2035 as portions of the fleet transition to reserve status.Coal plants are shifting from primary power suppliers to flexibility providers, with about 600GW completing flexibility retrofits to balance variable renewable generation.However, some uncertainty remains as to whether this trajectory will hold. Concerns include potential surges in power demand growth, extreme weather scenarios, renewable investment growth and systems resilience.“Coal-fired generation decline in 2025 suggests China's power sector carbon emissions may have peaked in 2024,” Ms Feng said.“If sustained, this would be a watershed moment for global clean energy and climate efforts. However, given uncertainties, coal generation may remain on an ‘undulating plateau’ rather than entering sustained decline in the next few years, with power sector emissions following a similar pattern.”One such uncertainty is the explosive growth of AI and data centres across China potentially driving unexpected spikes in electricity demand.The aggregate capacity of data centres will reach 78GW by 2030 — a 105% increase from 38GW in 2024, according to Wood Mackenzie.While China is investing heavily in renewable capacity, rapid demand growth in densely populated urban centres, coal-fired power may remain indispensable for maintaining grid reliability.“Time will tell, but this movement demonstrates the Chinese government’s commitment to reaching its peak carbon commitment by 2030, backed by concrete plans and massive investments,” Ms Feng said.
