China’s coal-fired power generation is rebounding in 2026, reversing a decline seen in 2025 that was the first such drop in a decade. According to data from the statistics bureau, thermal power usage—which consists primarily of coal with a small amount of gas—increased 3.4% year-on-year during the first five months of the year, reaching 2.53 trillion kilowatt-hours (kWh).
China’s Coal Power Generation Rebounds in 2026
Analysts from S&P Global Energy and Wood Mackenzie expect coal-fired power to rebound by 1.5% and 2% respectively, reaching 5.4 trillion kWh in 2026. Additionally, the data analytics firm Kpler forecasts that coal consumed within the power sector will rise approximately 3% to 2.7 billion tons.
The resurgence comes as renewable energy output growth has slowed in 2026. Matt Owen, an energy system analyst at the think tank Ember, attributed this slowdown to low solar utilization in China’s western provinces, weak wind generation, and a decrease in new installations compared to 2025.
Capacity Expansion and Renewable Curtailment
Despite a policy shift toward tighter control of new project approvals, China has continued to expand its coal fleet. New coal power plants entering operation reached their highest first-half year level since 2016, with 30 GW commissioned—a 43% increase over last year. During the same period, only 2.7 GW of capacity was retired, meaning 10 GW entered operation for every 1 GW retired. An additional 25.4 GW have started construction.
This expansion has contributed to oversupply and the wasting of clean energy. Estimated wind and solar curtailment reached 360 TWh in the first half of 2026, a 49% year-on-year increase. According to the Centre for Research on Energy and Clean Air (CREA), the additional power supply from these renewables could have met all demand growth and allowed coal generation to fall if the electricity had been absorbed.
Drivers of Increased Demand and Fuel Shifts
Several factors are driving the return to coal:
- Climate and Geopolitics: Analysts cite the impact of El Nino, which may boost air conditioning needs and potentially reduce hydropower, as well as the “Iran war” as contributing factors.
- Natural Gas Displacement: To mitigate higher costs resulting from the Strait of Hormuz blockade, China is cutting liquefied natural gas (LNG) imports. S&P forecasts that gas power will fall 12% to 300 billion kWh, with coal filling the gap.
- Demand Growth: China’s power demand is expected to grow by 5% again this year.
The Challenge of Decarbonization
The rebound highlights the difficulty China faces in decarbonizing its power sector. While China reached its target of 1,200 GW of wind and solar capacity by 2024—six years ahead of its 2030 goal—and saw renewables overtake coal in sheer capacity by mid-2023, coal remains central to the mix. According to the think tank Agora Energy, coal’s share in the generation mix was 51.4% last year.
Qi Qin, an analyst at CREA, stated that by continuing to build new plants every year, China is effectively locking in
a specific amount of power generation from coal. This is reinforced by medium- and long-term contracts. In 2026, coal generators are still expected to sign annual contracts covering 60-70% of the previous year’s delivered electricity, which Qin says makes it harder for renewables to displace coal.
China’s broader energy strategy involves an all of the above
approach. While the country is a leader in renewable deployment—with solar capacity rising 45.2% and wind rising 18% in 2024 to reach 890 GW and 520 GW respectively—it also remains responsible for over 50% of global coal consumption. This dual approach has resulted in China accounting for roughly 62% of the global increase in carbon dioxide emissions this century, according to reports from Oilprice.com.
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