Coal reigned supreme during the 1800s, acting as the engine of a new industrial age. From steamships conquering the seas to locomotives crisscrossing continents, it fueled a transportation revolution. This “dark satanic mill” power source also allowed for the construction of towering iron bridges and powered the booming textile industry. Coal became a symbol of humanity’s ingenuity, its ability to bend nature’s power to its will and drive economic progress.

Despite the rise of cleaner energy options, coal use remains significant. Global demand hit a record high in 2022 due to a switch away from natural gas after Russia’s invasion of Ukraine. While the US and EU saw a decrease in coal consumption in 2023, China and India continued to rely more heavily on coal, with use rising by up to 8%. This trend is reflected in power generation, where the International Energy Agency reports a slight increase in coal-fired power in 2023.

China dominates the world’s coal market, consuming over half of all coal used globally in 2022. This is primarily driven by their reliance on coal-fired power plants. While China’s coal power generation spiked in 2023, the International Energy Agency (IEA) believes this is temporary. Factors like a lack of hydropower due to drought and a post-pandemic economic surge likely caused the increase. The IEA predicts China’s coal dependence in power generation will actually decrease by 6% by 2026, as renewable energy sources gain traction.

Despite the IEA’s prediction of a decline, China’s future energy landscape might be different. The Chinese government prioritizes guaranteed energy access (energy security) during these times of global uncertainty. Additionally, their current power grid isn’t readily equipped to handle the variability of renewable sources like solar and wind. This suggests China’s transition away from coal might be slower and more complex than anticipated.

Powering China’s Future: Why Coal Remains King

China is heavily invested in coal power. Since 2022, they’ve approved over 100 gigawatts (GW) of new coal plants, with significant construction underway. This surge in coal infrastructure makes up over 95% of global coal plant development, according to a US think tank. However, the International Energy Agency (IEA) predicts a decline in coal use starting in 2024. They warn this rapid coal plant construction could hinder future efforts to reduce emissions. Interestingly, the IEA’s report seems to overlook the importance of coal for China’s energy independence, a top priority for the government.

According to Christopher de Vere Walker, an expert on energy utilities at Carbon Tracker, China prioritizes energy independence above all else. He explains that China’s energy decisions are driven by a desire for “energy sovereignty,” meaning complete control over their own energy sources, especially in a world facing political and economic uncertainty.

China’s climate representative, Xie Zhenhua, acknowledged last year that concerns about securing their own energy sources make a rapid shift away from fossil fuels impractical. This caution likely stems from China’s experience with a severe coal and power shortage in 2021. Energy independence and a stable energy grid remain top priorities for the Chinese government, according to Christopher de Vere Walker. These priorities suggest that China’s transition to renewable energy might be slower than the International Energy Agency predicts.

Renewables are insufficient
A Chinese government report reveals that a drought gripped southwest China from winter 2022 to spring 2023. This lack of rain and hotter temperatures significantly impacted global hydropower generation, causing an 8.5% drop by June 2023. A climate research group, Ember, sees this as a cautionary tale. They warn that relying less on hydropower due to weather events could slow down the overall shift towards renewable energy sources.

To compensate for the drop in hydropower, coal plants ramped up production by 190 million tonnes, according to the IEA. They predict hydropower will rebound soon, pushing coal use back down starting in 2024. However, even with an expected rise in hydropower capacity by 2035, analysts like De Vere Walker believe it won’t significantly challenge coal’s dominance. While hydropower will grow, it’s unlikely to replace coal as China’s primary power source anytime soon.

Moving away from coal quickly depends on a flexible and coordinated power grid, which China currently lacks. According to de Vere Walker, a single national grid operator would be much more efficient. However, China’s grid is fragmented and managed regionally. This means power can’t be easily shared across regions. For example, if a region experiences a surge in hydropower, another region might still rely heavily on coal simply because they can’t readily access the clean energy surplus. This regional structure creates inefficiencies that slow down the transition away from coal.

Even with a hydropower comeback, China’s fragmented grid might prevent it from truly replacing coal. Their current system struggles to share power efficiently between regions. To address this, China is developing a national electricity trading market. This would allow for quicker price adjustments based on real-time demand and supply, improving coordination across regions. However, coal plants are likely to remain in use as a reliable backup during peak electricity usage times.

However, Christopher de Vere Walker cautions against underestimating China’s progress in renewable energy. He highlights that Chinese policy prioritizes cleaner air, which could incentivize further development of renewable technologies.

While prioritizing the stability of their energy grid with coal and natural gas, China acknowledges the need for other technologies. These additional options would help balance out the continued reliance on coal and gas.

China’s renewable sector is seeing significant growth, with solar and wind power installations projected to reach a combined 1.3 terawatts (TW) by the end of 2024, according to a report by the China Electricity Council. However, analyst Christopher de Vere Walker remains cautious. He believes this expansion might not be enough to fully replace coal, especially considering the energy demands for heating purposes.

De Vere Walker highlights another challenge – heating. Many Chinese cities rely on coal for heating, and some even use heat generated as a byproduct of coal-fired power plants. Transitioning to clean energy for heating would require a massive increase in renewable energy production. On top of that, China’s current grid wouldn’t be sufficient to handle all this new renewable energy, requiring a significant grid expansion as well.

The International Energy Agency (IEA) predicts China’s coal use will peak in 2024 and then drop to 2.8 billion tonnes by 2026. However, the Chinese government prioritizes energy security, and this casts doubt on the prediction. They continue to approve new coal plants, and regional grid operators focused on stability will likely continue using them. While China is making strides in renewables, their capacity is still dwarfed by coal. Even with further growth in renewables, inefficiencies in the current grid system could slow down the decline of coal use.

China’s transition away from coal hinges on positive motivators, according to Christopher de Vere Walker. These could be environmental concerns like air pollution and climate change, or economic factors like control over fluctuating fossil fuel prices. Strong regulations and a market that incentivizes grid investment are crucial. De Vere Walker argues that a robust grid is essential for smoothly integrating renewable energy sources. Until China overcomes its grid limitations, coal will likely remain the kingpin of their power generation, as reliable energy access remains a top priority for the government.

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