
China is the largest producer and consumer of coal in the world and is the largest user of coal-derived electricity. In 2022, coal remained China's primary source of electricity generation, accounting for 61.7% of total output. However, renewable and low-carbon energy sources are becoming increasingly significant, with hydropower, wind power, solar photovoltaic, and biofuels collectively accounting for 30.4% of energy generation in 2022. While China's electricity sector is still dominated by fossil fuels, the country is making strides towards cleaner energy alternatives, with a notable expansion of clean energy sources in 2024.
| Characteristics | Values |
|---|---|
| Primary Source of Electricity Generation | Coal (61.7%) |
| Other Fossil Fuels | Natural Gas (3%), Oil (0.1%) |
| Renewable and Low-Carbon Energy Sources | Hydropower (15.1%), Wind Power (8.5%), Solar PV (4.8%), Biofuels (2%) |
| Nuclear Energy | 4.7% |
| Yearly Electricity Generated from Fossil Fuels | 66% |
| Clean Energy Generation in May 2024 | 44% |
| Electricity Demand Growth in May 2024 | 7.2% |
| Coal-based Power Generation Capacity in 2021 | 1080 GW |
| Electricity Generation from Coal in 2020 | 57% |
| Wind Power Capacity in 2014 | 114 GW |
| Wind Power Capacity in 2021 | 329 GW |
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What You'll Learn

China's electricity demand
China is the world's largest consumer of electricity, and in 2024 it accounted for a third of the global power demand. Despite a push for clean energy, fossil fuels still provided 62% of China's electricity in 2024, with coal being the primary source and accounting for 61.7% of the total output. China is the largest producer and consumer of coal in the world and is the largest user of coal-derived electricity.
However, China has also been the world's leading installer of solar photovoltaics since 2013 and the largest producer of photovoltaic power since 2015. In 2024, China contributed more than half of the global increase in solar and wind generation. The country aims to have 1,300 GW of solar capacity by 2050, which would make it the biggest contributor to Chinese electricity demand.
China has also seen a dramatic surge in its energy storage industry, with a nearly fourfold increase in capacity in 2023 due to advancements in technologies such as lithium-ion batteries. The country has introduced policies to promote the development of demand response, such as incentivizing electricity users to adjust their consumption patterns based on signals from grid operators.
While China's energy sector is moving in a new direction, with a focus on electricity and a transition to a service-based economic model, it still has challenges to overcome in reducing its reliance on coal and other fossil fuels.
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Fossil fuels vs clean energy
China is the largest producer and consumer of coal in the world and is the largest user of coal-derived electricity. In 2022, coal remained the primary source of electricity generation in China, accounting for 61.7% of total output. Fossil fuels still account for more than 80% of global energy production, but cleaner sources of energy are gaining ground. Renewable energy sources are considered to be solar, wind, water, waste, and heat from the Earth. They are replenished by nature and emit little to no greenhouse gases or pollutants into the air.
In 2020, the clean energy sector in the US employed about 3.4 million workers, with much of the workforce concentrated in the energy efficiency industry. Clean energy jobs outnumbered jobs in the fossil fuel sector 3 to 1 across 42 states and the District of Columbia. Clean energy workers also earn higher and more equitable wages when compared to workers nationally. The quality of jobs in the clean energy sector is, therefore, an important factor to consider.
In the US, solar and wind power costs are expected to remain higher in 2022 and 2023 than pre-pandemic levels due to elevated commodity and freight prices. However, their competitiveness improves due to sharper increases in gas and coal prices. Renewable energy sources are initially expensive to install, but they are generally cheap to use. Renewable energy subsidies are financial incentives that reduce the cost of using renewable energy sources, with the hope that more industries and energy consumers will make the switch from fossil fuels.
Renewable energy is derived from natural resources that are abundant and continuously replenished. Fossil fuels, on the other hand, are being depleted at a steady rate and are estimated to cease to exist in about 200 years. Renewable energy sources can be harnessed in a way that is almost completely harmless to the environment. Fossil fuels, when burnt, emit huge concentrations of CO2 into the atmosphere, causing irreversible damage to the environment, wildlife, and humans.
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Coal-fired power plants
China is the largest producer and consumer of coal in the world and is the largest user of coal-derived electricity. Over half of the world's coal-fired power is generated in China, which is more than four times the number of coal-fired power stations in India, which ranks second. In 2020, coal-fired power stations generated 57% of electricity in China, and in 2021, China's installed coal-based power generation capacity was 1080 GW, about half of the total installed capacity of power stations in the country.
In 2023, China was responsible for 95% of new coal power construction globally. That year, 47.4 GW of coal power capacity came online in China, accounting for two-thirds of the global rise in operating coal power capacity, which climbed 2% to 2,130 GW. China also had 70.2 GW of new construction begin in 2023, 19 times more than the rest of the world combined.
In 2024, China's construction of new coal-power plants reached a 10-year high. The country began building 94.5 GW of new coal-power capacity and resumed 3.3 GW of suspended projects. This was a sign of continued momentum in developing new coal projects, despite government pledges to "strictly" control the use of the fossil fuel. Approvals for new coal construction rebounded in the second half of the year to 66.7 GW, after permitting only 9 GW in the first half. This signalled that a substantial amount of new capacity would come online in the next few years, "solidifying" coal's place as a major source of electricity in China.
China's rapid buildout of coal could limit renewables' ability to become the country's main provider of electricity. While China installed record amounts of renewable energy capacity in 2024, bringing total solar and wind capacity up to 890 GW and 520 GW, respectively, coal capacity that year was 1,200 GW. The growing amount of low-carbon electricity in China's mix was expected to cover new demand and reduce coal's importance, but the flurry of new coal construction makes this increasingly difficult to achieve.
China's continued construction of coal-fired power plants is "undermining the country's clean-energy progress," according to a joint report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM). Analysts expect China's huge clean-energy capacity additions to slowly squeeze coal's share of electricity generation, as the country works towards its dual-carbon goals of peaking carbon emissions by 2030 and reaching carbon neutrality by 2060. However, to achieve these goals, China will need to take immediate action to impose stricter controls on coal power projects and expedite the transition towards renewable energy.
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The role of government
The Chinese government has played a significant role in the country's electricity sector, which is the largest in the world. In 1996, the government implemented the Electric Power Law, which aimed to promote the development of the electricity industry, protect the rights of investors, managers, and consumers, and regulate generation, distribution, and consumption. This law marked a shift from provincial government control to corporate management, breaking up the State Power Corporation's monopoly and establishing 11 smaller companies.
The government has also set ambitious targets for peak coal consumption and carbon neutrality. To achieve these goals, China has closed many small and dirty coal mines, implemented administrative caps on coal output, and invested in renewable energy sources. While coal still accounts for the majority of electricity generation in China, the government is pushing for emissions reductions and improved air quality by transitioning to gas and expanding renewable energy sources.
China's central government is facing the challenge of expanding supply to meet the country's growing energy needs. This requires large investments in pipelines, LNG terminals, and R&D for new extraction technologies. The government is also working to drive down the cost of gas generation technology and integrate more renewable sources, such as wind and solar power.
The electricity sector in China is in a state of transition, moving away from a planned economy towards an independent regulatory system. This shift has implications for the success of the country's energy and climate policies. The government is focused on promoting investment in electricity networks and a mix of generation technologies to ensure power system flexibility and security.
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Environmental impact
China is the largest producer and consumer of coal in the world and is the largest user of coal-derived electricity. In 2021, coal accounted for 62% of electricity generation in China, with other fossil fuels contributing a smaller share: natural gas at 3.0% and oil at 0.1%. This heavy reliance on fossil fuels for electricity generation has enormous environmental consequences. In 2007, electricity generation in China produced over 2 billion metric tons of carbon dioxide (CO2), accounting for about one-third of its energy-related greenhouse gas emissions. Fossil fuel combustion also emits other pollutants, such as nitrogen oxide (NOx) and sulfur dioxide (SO2).
China has been transitioning towards renewable energy sources, which play an increasingly important role in the country's electricity sector. In 2023, renewable energy sources accounted for 53.9% of China's total power generation capacity, with wind and solar power being the most significant contributors. Hydropower, while being the largest renewable energy source, has seen a decline in recent years due to severe drought conditions. The shift towards renewable energy is driven in part by the environmental impacts of fossil fuels and the need to address climate change. Renewable energy sources produce lower levels of GHG emissions and conventional air pollution compared to fossil fuels.
However, it is important to note that renewable energy technologies still have environmental impacts. The manufacturing and transportation of renewable energy infrastructure can generate emissions and pollutants. Additionally, the social and environmental impact of dam construction in China, particularly for hydropower projects, has been significant, with millions of people forced to relocate and large-scale damage to the environment.
To mitigate the environmental impacts of electricity generation, China has implemented policies such as the Electric Power Law in 1996, which aimed to promote the development of the electric power industry and regulate generation, distribution, and consumption. More recently, China has pledged to achieve peak coal consumption by 2030 and carbon neutrality by 2060. To meet these goals, the country has closed many small and dirty coal mines, implemented administrative caps on coal output, and invested in renewable energy projects. These efforts have had mixed results, with some environmental standards being relaxed and electricity outages occurring in several provinces.
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