China’s dual energy strategy is a study in contrasts, as it leads global renewable energy efforts while simultaneously expanding its coal projects.
As the world’s largest greenhouse gas emitter, China’s energy choices are pivotal in the global fight against climate change.
The renewable energy landscape in China is impressive. Expansive solar farms stretch across the deserts, and the nation added more renewable capacity last year than the total existing capacity in the United States. President Xi Jinping has also committed to the country’s first emissions reduction targets.
However, coal power capacity has seen significant growth in the first half of this year, with new and renewed proposals reaching their highest level in a decade.
China was responsible for 93 percent of new coal construction globally in 2024, as reported by the Centre for Research on Energy and Clean Air (CREA).
Muyi Yang, a senior energy analyst at Ember, explained China’s “build before breaking” strategy. This approach avoids dismantling the old system until renewables are fully operational.
“Think of it like a child learning to walk,” Yang told AFP, highlighting the potential for supply interruptions and price spikes, which could erode public support if not managed.
Policymakers are cautious due to past power shortages between 2021 and 2022, caused by pricing, demand, grid issues, and extreme weather.
While improvements in grid reform and storage could mitigate these issues, authorities are opting to expand coal capacity as a safety net, even if these plants remain idle.
“There’s the basic bureaucratic impulse to make sure that you don’t get blamed,” said Lauri Myllyvirta, co-founder and lead analyst at CREA.
“They want to make absolutely sure that they don’t block one possible solution.”
Grid and Transmission Challenges
David Fishman, a China power expert at Lantau Group, points to an economic rationale behind China’s energy strategy.
The country’s electricity demand has outpaced even record-breaking renewable installations.
This trend may shift in 2025, when renewables might finally meet demand growth, though slower demand has played a role, and coal remains profitable for many companies.
Grid and transmission issues also enhance coal’s appeal.
Large-scale renewable projects are often located in energy-rich but sparsely populated areas, raising the cost of transmitting power over long distances, which incentivizes local energy capacity expansion, according to Fishman.
China is working to improve its infrastructure for long-distance power trading, yet progress is still needed, he noted.
Coal’s advantage as a “dispatchable resource”—easy to ramp up or down—contrasts with the dependency of solar and wind on weather conditions.
To enhance renewable integration, “you have to make the coal plants operate more flexibly… and make space for variable renewables,” Myllyvirta stated.
China’s grid remains “very rigid,” with coal-fired plants as “the beneficiaries,” he added.
Economic Implications
Additional challenges arise with the end of feed-in tariffs, necessitating new renewable projects to compete in the open market.
Fishman argues that “green power demand is insufficient to keep capacity expansion high,” though government policies could shift this balance by mandating increased renewable usage by companies.
China’s goal of achieving 3,600 gigawatts of wind and solar by 2035 may not satisfy future demand, potentially leading to further coal expansion.
However, an increase in coal capacity does not necessarily translate to higher emissions, as China’s coal plants currently operate at only 50 percent capacity.
The “clean energy” sector, including solar, wind, nuclear, hydropower, storage, and electric vehicles, is a significant economic driver.
CREA estimates a record 10 percent contribution to China’s GDP last year, accounting for a quarter of economic growth.
“It has become completely instrumental to meeting economic targets,” Myllyvirta commented, expressing cautious optimism despite challenges.
Original Story at www.purdueexponent.org