The Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) have released their H1 2025 biannual review of China’s coal projects, which finds that coal power additions are continuing to grow.
Although there were some signs of coal power slowing down in 2024 and 2025 has seen China’s clean energy boom meet a significant amount of power demand growth and lower CO2 emissions, coal power remains strong, with new and revived projects the highest in a decade.
In H1 2025, 21 gigawatts (GW) of coal power were commissioned, the highest amount in the first half of the year since 2016, with projections for the full year exceeding 80 GW. This increase in commissions follows on the tail of the 2022-2023 coal power permitting surge that saw two new coal projects permitted per week, on average, totalling more than 100 GW of coal power approved per year. This trend will likely continue into 2026 and 2027, unless policy action is taken.
Only 25 GW were permitted in H1 2025, yet new and revived projects came to 75 GW in H1 2025, the highest in a decade, and construction starts and restarts reached 46 GW, equivalent to the entire coal power capacity of South Korea.
This rush of activity signals possible pressure from the industry to expand coal projects as a last ditch effort before China’s 2030 carbon peaking deadline, right when strategic phase-down should be the priority to meet climate goals and as clean energy is meeting all of new power demand growth.
In June 2025, coal’s share in power generation dropped to a nine-year low of 51%, and only made up 34% of China’s total installed capacity, while renewables accounted for 60%, pointing to the ongoing trend of coal losing steam while an artificial push attempts to expand rather than phase down its historic role.
Although China pledged in 2022 that coal should play a flexible, supporting role while renewables are integrated, this policy has yet to be implemented in any meaningful way. Further reform and incentives are needed to transition into scaling down coal power generation and planning a coal exit strategy: in H1 2025, only 1 GW of coal power was retired. 13 GW need to be retired by the end of 2025 to meet the 14th Five-Year Plan goal of retiring 30 GW by the end of 2025.
With the Nationally Determined Contributions (NDCs) and 15th Five-Year Plan on the horizon, China has a critical opportunity to set binding targets and initiate policy reform that could confirm China’s role as a global leader in the energy transition.
Key findings:
- Coal power construction and commissioned projects remain high, with no clear signs of slowing. 21 gigawatts (GW) was commissioned in H1 2025, the highest first-half total since 2016. And full-year additions are expected to exceed 80 GW, according to association projections. Construction starts and restarts reached 46GW, equivalent to the entire coal power capacity of South Korea and sustaining the high pace set in 2022.
- New project approvals remain strong, with signs of pre-carbon peak acceleration. 25 GW was permitted in H1 2025, slightly down from previous years. However, new and revived proposals totalled 75 GW, the highest H1 figure in a decade, reflecting a continued push to advance coal projects before the 2030 carbon peaking deadline.
- The commissioning boom of 2025 reflects a delayed response to the permitting surge of 2022–2023, when more than 100 GW of coal power was approved each year. Unless policy action is taken, these previously approved projects will continue to drive high levels of commissioning in 2026–2027.
- Clean energy is expanding at unprecedented speed, reshaping China’s power mix, while coal’s role in generation continues to decline. Wind and solar additions are expected to exceed 500 GW in 2025, which is more than enough to meet total electricity demand growth. Coal’s share in power generation dropped to a historic low of 51% in June 2025. At the same time, renewables account for 60% of total installed capacity, compared to about 34% for coal. Yet coal capacity continues to rise, highlighting a widening disconnect between capacity growth and actual power generation.
- Coal power is not fulfilling its intended role as a flexible backup for renewables. Current dispatch practices predominantly rely on coal power plants for ramping up power generation when needed, with minimal incentives or explicit requirements to flexibly scale down power generation.
- China still lacks a coherent coal exit strategy, and power plant retirements are far behind official targets. Only 1 GW of coal power was retired in H1 2025, with just 16 GW retired since 2021. To meet the 14th Five-Year Plan goal of 30 GW by the end of 2025, 13 GW would need to be retired in H2, which appears to be an increasingly unlikely prospect.
- The upcoming Nationally Determined Contributions (NDCs) and 15th Five-Year Plan offer a crucial opportunity to establish a clear, coordinated roadmap for managing coal power’s decline. While China’s energy policy direction is aligned with long-term climate goals, the absence of binding targets and institutional reform has allowed legacy incentives for coal power to persist. Without stronger national guidance, clean energy progress may be offset by continued coal expansion, delaying energy transition and stalling emission reductions.
Policy recommendations
To align China’s power system with its dual carbon goals and avoid locking in unnecessary coal power capacity, we recommend the following actions:
- Develop a national roadmap for coal power phase-down. Establish clear national targets and timelines for peaking and reducing coal power capacity, generation and associated emissions, to be incorporated into the upcoming 15th Five-Year Plan. Require provinces to publish their own coal power transition roadmaps, including retirement schedules, to align local actions with national priorities.
- Tighten permitting standards and cancel non-essential coal power projects. Clearly state that no new conventional coal power plants should be approved in principle during the 15th Five-Year Plan period, with narrowly defined exceptions. Conduct a review of the 2022–2025 permit wave to identify projects that should be cancelled or deferred based on updated system needs.
- Align provincial actions with national goals. Include coal power reduction progress in performance evaluations of local governments. Promote best practices from early movers and encourage other provinces to follow with peak and phase-down plans.
- Reform capacity payments to reward flexibility, including for technologies beyond coal plants, like batteries and pumped hydro. Link capacity payments to actual system service delivered, especially ramping down during periods of high renewable generation. Gradually phase out capacity compensation for inflexible or underperforming coal power units.
- Revise long-term contract structures to reflect system needs. Reduce the share of coal power covered by long-term power purchase agreements. Accelerate the shift from administrative contract guarantees to market-based contracting frameworks.
- Reform dispatch rules to prioritise renewable integration. Eliminate dispatch practices that give fixed priority to coal output over renewables.
- Accelerate retirement of inefficient and ageing coal power plants. Create a retirement incentive mechanism, including financial compensation, land reuse support, and workforce transition planning.