from NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
The Energy Institute, which took over the BP Energy Review, have sent out their latest newsletter:
One interesting piece of news comes from China:
China’s 15th Five-Year Plan (2026–2030) and later targets have called for, among other measures, the creation of around 100 million tonnes/year of coal production-capacity reserve (production+net imports-consumption) by 2030.
Over the past 25 years, China has also substantially increased coal production, with output more than tripling. China’s coal supply surplus (production-net imports-consumption) is already around 600 Mt/year, roughly six times the target. Domestic production already exceeds demand by around 120MT per annum.
China’s coal-fired power generation was historically the main driver of rising global carbon emissions. But now, China’s coal-fired power sector may be weakening. The country’s coal-fired power fleet lags in capacity factor (estimated at around 50%) compared with an estimated global average of around 57%, and coal-fired generation declined in 2025.
But coal remains strategically important beyond power generation, with China also pursuing the expansion of coal-to-gas, coal-to-liquids and coal-based chemical production.
This new coal economy is not meant as a replacement for renewables, but rather as a strategic security measure.
Coal-fired generation in the US increased last year, and the new administration is certainly supportive of coal, but despite this, the US is a net exporter of coal. India has more than tripled its domestic coal production since 2000 but remains a significant coal importer.
The simple truth is that China will remain heavily dependent on coal for many years to come. Ignore the misinformation about a “weakening coal power sector” – last year it dropped from 5836 to 5755 TWh, a drop in the ocean. Coal power still supplies 54% of China’s electricity.
The Chinese know that they cannot run their power grid on intermittent renewables alone, so coal will remain the major player.
Moreover coal still accounts for 57% of China’s primary energy, against just 6% for renewables.
And coal production in the country continues to grow year-by-year:
China’s determination to keep building coal surpluses is a pretty good indicator that they will keep on using it as well!
