China's coal power rebounds as record clean energy goes to waste

China's coal power capacity has seen a significant increase in the first half of 2026, with the world's largest greenhouse gas emitter bringing 30 gigawatts (GW) of new coal power capacity into operation in the six months to June.

The coal expansion stems from a surge in power plant approvals that followed power shortages caused primarily by high coal prices in 2021, when blackouts and factory shutdowns hit roughly 20 Chinese provinces. Local governments responded by fast-tracking new coal projects as insurance against future outages.

A further 274 GW of coal capacity - equivalent to roughly a fifth of China's existing coal fleet - is already either under construction or has permits to be built, meaning much of the sector's expansion is locked in for years.

## Climate concern

Qi Qin, the report's author, has expressed concern about the coal lock-in, stating that after coal power plants are built, they will seek revenue and operating hours for decades, which can crowd out clean power and slow the retirement of the older coal power units.

The coal buildout is happening at the same time as Beijing signals a gradual shift in its energy rhetoric, with the Chinese government calling for the country to "reasonably control" both China's capacity to generate electricity from coal and, for the first time, how much electricity it actually generates from coal.

## Growing renewables curtailments

While China generated less than half of its electricity from coal for the first time in the six months to last June, growing demand for electricity meant coal power generation still rose 3.4%, reversing a roughly 1% decline recorded in 2025.

Available clean electricity from solar and wind, which have seen a record expansion in China, would have been more than enough to meet the extra demand and drive coal power down if it had been fully used, the report said. Instead, the amount of clean electricity wasted kept growing.

Estimated rates of curtailment, the intentional reduction of electricity from a source, for wind and solar were up by about a half in the six-month period compared to last year, wasting the equivalent of Indonesia's annual electricity output.

| **Type** | **Curtailment rate (compared to last year)** | | --- | --- | | Wind | +50% | | Solar | +50% |

## Coal's protected status

Researchers said that the Chinese grid's inability to absorb the additional clean electricity, in addition to energy contracts and pricing mechanisms skewed in favour of coal power, caused the waste of clean electricity.

Chinese coal generators are required to sign long-term contracts covering a fixed share of the previous year's output, now standing at 70%. Qi said that, out of fear of electricity shortages, regulators introduced these arrangements to protect coal power plants by guaranteeing them predictable prices and utilisation rates.

Additionally, China has also begun paying coal plants to stand ready to generate electricity, rather than for actually running, through new capacity payments introduced this year.

The report suggested lowering, or even suspending, coal-specific contract minimums in provinces that are experiencing clean energy being wasted or prolonged periods of zero or negative electricity prices. That would help coal transition to a more flexible backup role and facilitate the integration of renewables, the researchers argued.

They also urged the Chinese authorities to halt permits for new coal power projects and reassess those that have already been permitted, while favouring grid expansion, energy trade across provinces and storage as ways to boost energy reliability.