China approves 25 GW of new coal power projects in H1 2025, commissioning at a decade high

China approved 25 GW of new coal power projects in the first half of 2025, slightly lower than the average in recent years and underscoring continued reliance on coal even as renewable capacity scales at record pace, the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) said in a report Aug. 25.

Although the volume of permits declined from the highs of 2022-2023, when more than 100 GW was approved annually, coal project activity remains strong. Newly proposed and revived projects reached 53 GW in H1 2025, the highest first-half total in over a decade, indicating that coal project developers are still pushing fossil fuel-based energy ahead of China's 2030 carbon peaking target.

Coal commissioning also rose sharply. Around 21 GW of coal-fired capacity was brought online in January-June, the highest first-half total since 2016, the report said. Full-year additions are expected to surpass 80 GW, making 2025 the biggest year for coal power completions in a decade as projects from the permitting boom of 2022-2023 reach the execution stage, the report said.

Construction momentum also remained elevated, with 44 GW of new capacity starting or resuming work in H1. Provinces with large coal resources, such as Xinjiang, Inner Mongolia and Shaanxi, led additions, reinforcing coal's role as a dependable source of dispatchable power.

Meanwhile, clean energy growth continued to reshape China's generation mix. Wind and solar installations in 2025 are forecast to exceed 500 GW, more than covering the 3.7% rise in electricity demand during H1. Solar and wind generation grew by 20% and 10.6% year over year, respectively, while coal-fired generation declined 2.9%. Coal's share of total generation dropped to 51% in June, a record low.

Despite this, coal plants remain "structurally protected", the report said. More than 60% of newly permitted projects were described as providing "regulation" or "support" to the power system.

Coal retirements have lagged far behind targets. Only 1 GW was retired in H1 2025, bringing the total to 16 GW since 2021. To meet the 14th Five-Year Plan goal of 30 GW retirements by the end of 2025, 13 GW would need to be closed in H2, which the report described as increasingly unlikely.

"Coal's share in power generation has fallen to record lows, but additions remain at decade highs, reflecting the persistence of structural and institutional reliance on coal in China's power system," CREA and GEM said.

China's domestic coal production has been robust through the first half of 2025, cutting down on its requirements for spot imported cargoes until July, when the government's crackdown on mines to curb oversupply, and heavy rains impacted activities in coal mines across the country.

National Statistical Bureau data showed that the country produced 2.40 billion mt of raw coal in the first six months of 2025, up 5.4% year over year. However, the output fell 3.8% year over year in July to 381 million mt, the lowest since April 2024.

Sources said the decline in domestic production brought back enquiries to the Asian thermal coal market for seaborne cargoes as arbitrage opened for Chinese traders.

The price of China-delivered 3,800 kcal/kg NAR averaged $54.10/mt in the January-June period in 2025, down from $66.29/t in the year-ago period, according to data from S&P Global Commodity Insights. The grade was assessed at $52.35/t on Aug. 22.

China imported a total of 139.70 million mt of thermal coal in H1 2025, down from 174.6 million mt in the corresponding period a year ago, data from S&P Global Commodities at Sea showed.