- Coal fired power generation in China declined for the first time in a decade.
- Rapid growth in renewables nuclear and hydro met all new power demand in 2025.
- The shift signals a potential peak in power sector carbon emissions.
China coal fired power generation declined by 1.9 percent in 2025 marking the first annual fall since 2015 and signalling a major turning point in the country’s power sector. The decline comes despite strong electricity demand growth and is driven by a surge in non-fossil generation capacity according to a new analysis by global energy consultancy Wood Mackenzie.
Total power demand in China rose by five percent in 2025 equivalent to 494 terawatt hours. For the first time in more than a decade this additional demand was not met by coal fired generation. Instead carbon free sources including wind solar nuclear and hydropower supplied all incremental demand underscoring the scale and speed of China’s clean energy buildout.
At the centre of this shift is the rapid expansion of renewable energy. China’s combined wind and solar capacity has increased more than tenfold over the past decade reaching 1 842 gigawatts. Falling technology costs have been a key enabler with levelised costs of energy for utility scale solar and onshore wind dropping by 77 percent and 73 percent respectively since 2015. These cost reductions have made renewables increasingly competitive with fossil fuels and have unlocked large scale private and state backed investment.
Beyond wind and solar China has continued to expand its nuclear and hydropower fleet. Nuclear capacity has grown from 27 gigawatts in 2015 to 62 gigawatts today while combined nuclear and hydro capacity now totals 445 gigawatts. Significant investment has also been directed toward power transmission infrastructure with 340 gigawatts of interregional transmission corridors now in place. These links allow renewable electricity generated in western and northern regions to be delivered to industrial and population centres along the eastern and southern seaboard.
Coal generation is not disappearing but its role is changing. Average capacity factors for coal plants have steadily declined from 60 percent in 2011 to 48.2 percent in 2025 and are expected to fall further to around 32 percent by 2035. Large parts of the coal fleet are transitioning from baseload supply to reserve and flexibility roles with around 600 gigawatts of capacity already retrofitted to support variable renewable generation.
Despite this momentum Wood Mackenzie cautions that uncertainty remains. Factors such as extreme weather rapid growth in electricity demand renewable investment trends and grid resilience could all influence future coal utilisation. One emerging risk is the rapid expansion of artificial intelligence and data centres which could drive sharp increases in urban electricity demand.
Data centre capacity in China is forecast to reach 78 gigawatts by 2030 more than double the 38 gigawatts recorded in 2024. Because much of this demand will be concentrated in major cities coal fired power plants may still be required to ensure grid stability in the near term.
Even so the 2025 decline in coal fired generation suggests that power sector carbon emissions may have peaked in 2024. If the trend is sustained it would represent a landmark moment for global energy transition efforts and reinforce China’s stated commitment to reaching peak carbon emissions before 2030 backed by large scale infrastructure investment and long term planning.
Author: Bryan Groenendaal
