China's Coal Power Generation Returns to Growth

China saw in August the first increase in coal-fired power generation in four months as coal remains a vital part of the system despite soaring output from clean energy sources and a growing share of renewables in the electricity mix.

China’s electricity output from thermal sources – which are predominantly coal-fired – increased by 3.7% in August compared to the same month last year, according to official Chinese data cited by Reuters columnist Clyde Russell.

The rise in coal power generation lagged the growth in electricity output from renewable sources. Yet, it underscores the still important role of coal in China’s electricity mix.

Despite continued growth in coal-fired power generation, China reached a momentous milestone in clean energy in the first half of the year, as rising hydropower, solar, and wind output pushed down the share of coal in power generation to below 60% for the first time ever.

The decline in coal's share—largely helped by soaring hydropower after two years of drought—is the latest chapter in a trend in recent years.

China has already reached its goal to have more non-fossil fuel installed electricity capacity than fossil fuels earlier than planned, with 50.9% of its power capacity now coming from non-fossil fuel sources. Back in 2021, the Chinese authorities said they would target renewables to outpace fossil fuel-installed capacity by 2025.

While China is pursuing rapid expansion of its renewable energy capacity, it isn’t ditching coal. The world’s second-largest economy leads in global renewable investments and installations and has a dominant role in many of the clean energy supply chains, including solar equipment, lithium processing, and mining and processing of other critical battery metals.

But China also continues to expand its coal-fired power fleet as its electricity demand grows, to ensure energy security and stable electricity supply, especially in peak demand periods.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

• How Israel Planted Explosives in Thousands of Hezbollah Pagers
• Chinese Refineries Go Bankrupt Amid Plummeting Margins
• Hedge Funds Have Never Been This Pessimistic About the Oil Market