In 2025, China’s new and reactivated coal power project proposals surged to a record high, while capacity additions that came online reached the highest annual level in a decade, even as clean energy put China’s CO2 emissions into reverse for the first time and drove down coal power generation.
The Centre for Research on Energy and Clean Air and Global Energy Monitor‘s H2 2025 coal power review reveals that new and reactivated coal power project proposals in China surged to 161 gigawatts (GW) in 2025, a record high.
2025 also saw China commission 78 GW of new coal power capacity, which is more than India’s net coal power additions over a ten-year period from 2015 to 2024, even though India operates the world’s second-largest coal power fleet.
The latter is a legacy from the permitting spree that started in 2022 in response to power shortages the previous year, largely due to insufficient system flexibility.
Today, clean energy is already meeting all demand growth in electricity, yet China is finding itself embroiled in years of coal expansion beyond power demand growth and climate requirements. Not only does China’s 2030 Nationally Determined Contribution (NDC) target imply no growth in power sector emissions, but the Recommendations of the 15th Five-Year Plan (FYP) also imply steadily replacing fossil fuels and raising the share of wind and solar in the energy supply.
However, by the end of 2025, a total of 291 GW of coal power capacity remained in China’s pipeline (already permitted or under construction), equivalent to around 23% of today’s operational coal fleet.
At the same time, China added around 74 GW of new energy storage capacity in 2025, broadly comparable to the coal power commissioned in the same year. This shift toward flexibility-based system resources is steadily reducing coal power’s role in meeting peak demand and balancing the grid, further constraining both its operating space and the investment case for continued coal capacity expansion.
Key findings
- 2025 saw China’s current coal power build-out cycle reach a new high. Coal power capacity additions reached their highest level in a decade, even as coal power generation declined, and clean energy met all net growth in power demand. Rapid growth in energy storage further eased system constraints. The rising overcapacity amid falling utilisation exposes the widening gap between investment decisions and power system realities.
- New and reactivated coal power project proposals surged to a record high. If built, the projects proposed in just this one year would commit China to years of coal expansion beyond power demand growth and climate requirements, reflecting a rush by the coal industry stakeholders to advance projects ahead of tighter policy constraints.
- With a large pipeline of projects still under construction and permitted, rapid growth of coal power capacity risks extending into the early years of the 15th Five-Year Plan (FYP) period, while coal power retirements remain low. Falling utilisation has not led to an orderly exit, but instead growing reliance on compensation mechanisms and life-extension measures for ageing units.
- Meeting China’s 2030 Nationally Determined Contribution (NDC) target implies a shift away from baseload coal power and a decline in operating hours. Yet coal capacity commissioned in 2025, and much of the remaining pipeline, remains dominated by large units designed for high-utilisation, reflecting incentives that favour energy and capacity over flexibility.
- The 15th FYP will be decisive in redefining coal power’s role. Without a clear end to net coal power capacity growth and a decisive shift away from baseload operation, China risks locking in a structural barrier to energy transition and decarbonisation.
Policy recommendations
- Set an explicit power-sector emissions peaking target within the 15th Five-Year Plan, ensuring that power-sector emissions do not increase during 2025–2030 and providing a binding constraint against further coal power expansion.
- End net growth in coal power capacity at the beginning of the 15th FYP period, by halting approvals for new and re-activated coal power projects and tightening permitting standards for projects still in the pipeline.
- Introduce a binding cap on coal consumption in the power sector, with a declining trajectory toward 2030, translating China’s carbon-intensity target into an operational constraint on coal power generation.
- Accelerate the retirement of coal power units that are ageing, inefficient or persistently underutilised, prioritising plants with high emissions intensity, poor flexibility performance, or declining load factors. Retirement pathways should be explicitly linked to tighter air quality standards and system-level needs, rather than assumptions about the natural lifetime of coal power plants.
- Reconfigure coal power operation at the fleet level to support system flexibility. Move away from keeping most coal power units continuously online at low output, and instead hold part of the fleet offline as reserve, while allowing remaining units to operate at relatively higher and more stable load levels. This increases both upward and downward regulation space, improves system flexibility and reduces emissions and costs while increasing renewable energy utilisation.
- Reform capacity payment mechanisms to reward flexibility and system value, rather than installed capacity alone, ensuring that compensation reflects availability, responsiveness and performance during periods of system stress.
- Adjust long-term power contracts and market rules to accommodate declining coal utilisation, reducing guaranteed energy volumes for coal power and preventing long-term contracts from crowding out wind and solar generation.
- Strengthen national coordination over coal power planning and investment, limiting local incentives to expand coal capacity and ensuring that investment decisions reflect system-level needs rather than provincial interests.
