- China’s Dual Energy Strategy at a Crossroads
China’s energy production strategy in 2024 has been marked by both an unprecedented surge in renewable energy and a persistent reliance on coal, according to a new analysis by two think tanks, the Global Energy Monitor and the Centre for Research on Energy and Clean Air (CREA). While China has made massive strides in renewable energy generation, its continued approval of coal-fired power projects threatens to undermine its ambitious clean energy transition.
The analysis, released on Thursday, highlights the paradox at the heart of China’s energy policy. The country is simultaneously the world’s largest producer of renewable energy and its biggest carbon emitter. Despite its pledge to peak carbon emissions before 2030 and achieve carbon neutrality by 2060, China’s commitment to coal remains a significant obstacle to meeting those targets.
“Coal-fired power generation could decline, yet the coal industry continues to expect growth, setting the stage for an increasingly unsustainable conflict between coal investments and the need to decarbonize the power system,” the report stated.
Renewable Energy
China’s renewable energy sector made remarkable progress in 2024, adding 356 gigawatts (GW) of wind and solar capacity. This figure is nearly equal to the total capacity of the United States for the same year and more than four times that of the European Union. These record-breaking additions highlight China’s ability to rapidly scale up clean energy infrastructure.
However, despite this surge, the utilization of renewables unexpectedly declined later in the year. CREA found that solar and wind power generation dropped, even though weather conditions did not explain the decrease. The report suggests that a significant portion of renewable energy may have been curtailed—meaning it was available but not used due to grid constraints or market limitations.
“The record decline in solar output and the unexpected drop in wind utilization was not explained by weather conditions, indicating rising curtailment—much of which may be unreported,” the report said.
Coal
Despite the massive renewable energy boom, coal continues to dominate China’s power generation. In 2024, China approved 66.7GW of new coal-fired capacity, started construction on 94.5GW of coal power projects—the highest annual figure since 2015—and resumed work on 3.3GW of previously suspended projects.
This coal expansion means China was responsible for 93% of all new coal power construction globally in 2024. While approvals for new coal plants slowed in the first half of the year (with just 9GW approved), they surged again in the latter half, dampening hopes that China was shifting away from coal.
Furthermore, despite approving and constructing vast amounts of coal power, the actual new coal capacity brought online in 2024 was about 30GW—far below the government’s target of 80GW. However, analysts warn that the new projects in the pipeline will more than compensate for this shortfall in the next few years.
Policy Conflicts and Energy Security Concerns
China’s simultaneous push for both renewables and coal is rooted in concerns about energy security. Long-term power purchase agreements, introduced in 2020, require local governments to guarantee minimum quotas of coal power purchases. These agreements were designed to ensure stable electricity supply at predictable prices, particularly during peak demand periods.
However, these contracts have inadvertently created a barrier to greater renewable energy integration. Even though China has the capacity to utilize more solar and wind power, the priority given to coal in energy contracts means that clean energy is sometimes left underutilized.
“More solar and wind should be integrated into the power grid, but the fact is it wasn’t [because of these agreements],” said Qi Qin, lead author of the report and a China analyst at CREA.
China’s leadership views coal as a necessary backup during periods of fluctuating renewable output. However, experts argue that modernizing the grid and improving battery storage capacity would allow China to phase out coal more quickly without jeopardizing energy security.
China’s Energy Policy
China’s energy decisions have far-reaching implications for the global fight against climate change. As the world’s largest emitter of greenhouse gases, China’s ability to transition away from fossil fuels will be crucial in meeting international climate goals.
While China’s clean energy expansion is unmatched, its continued coal dependency risks undermining global efforts to curb carbon emissions. If China continues building new coal plants at its current rate, the world could struggle to keep global temperature rises within the 1.5°C target set by the Paris Agreement.
The paradox of China’s energy policy—expanding renewables while still backing coal—reflects the tension between economic growth, energy security, and climate commitments. Some analysts argue that China’s coal policies are a temporary measure to prevent power shortages as the country shifts toward cleaner energy sources. However, others warn that each new coal plant approved locks in decades of carbon emissions, making the transition to net-zero far more difficult.
China’s rapid deployment of clean energy proves that the country has the capability to decarbonize its power sector at an accelerated pace. However, achieving this goal will require policy shifts that prioritize renewables over fossil fuels.
China overcome its current energy contradictions:
- Strengthening Grid Infrastructure – Upgrading power grids to better integrate renewable energy and minimize curtailment will be crucial in ensuring solar and wind power are fully utilized.
- Expanding Energy Storage – Investing in large-scale battery storage can help stabilize power supply and reduce reliance on coal during periods of low renewable output.
- Reforming Power Purchase Agreements – Revising long-term contracts that prioritize coal over renewables will allow for a more flexible and sustainable energy market.
- Accelerating Coal Phase-Out – Setting clear deadlines for retiring existing coal plants and halting new coal project approvals would signal a stronger commitment to decarbonization.
Qin, the lead author of the report, acknowledges that China is making progress but insists that it must act faster.
“China knows that it has two carbon goals, and it knows they have to stop increasing coal consumption by 2025. With the abundance of renewables, China has the capacity to move even faster,” Qin said.
China’s energy production landscape in 2024 is defined by a clash between two opposing forces: a historic surge in renewable energy and a lingering commitment to coal. While the country has taken significant strides in clean energy, its continued coal expansion threatens to derail its climate goals.
The competition between coal and renewables reflects a deeper structural misalignment in China’s power sector. If China truly wants to lead the global transition to clean energy, it must resolve this contradiction by prioritizing renewable integration and phasing out coal more aggressively.
With the right policies and investments, China has the potential to not only meet but exceed its climate targets. However, the window for action is closing fast. Whether China can resolve this energy paradox will determine not just its own environmental future, but the trajectory of the global fight against climate change.
