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In the past few years, China has been ramping up its construction of coal plants, partially eschewing climate targets for greater domestic energy production. China’s coal construction totaled an output of 94.5 GW in 2024, the highest number in 10 years, the equivalent of approximately 90 nuclear reactors.

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China is turning the clock backwards on its market-driven reforms; the country’s coal boom isn’t reflecting market pressures, but rather Beijing’s top-down campaign for energy security. With the surge in coal plant construction, operational inefficiencies are undermining the industry’s sustainability. China’s average coal plant operating hours have fallen to 4,628 hours a year, or about 53% of a year. This means the average Chinese plant sits idle for nearly half the year, signaling severe underutilization.

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To counter [...] market challenges, Beijing is artificially boosting demand. The National Development and Reform Commission of China, the country’s economic planner, asked domestic buyers to focus on purchasing from the northern regions to offset the excess supply there. It also directed a 10% increase in thermal coal reserves, stockpiles used for heating and electricity, continuing the trend of inflating demand.

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The proliferation of coal and cheap domestic energy, no matter how inefficient, has another impact: increasing Chinese exports. With sometimes literally free energy, producers of green tech products in China, such as EVs and Solar Panels, have no choice but to look overseas. This embraces the core competencies of the traditional method of Chinese growth since 1979, export-led development, while simultaneously serving China’s foreign policy objectives by burnishing its image as a green energy superpower providing renewable tech to the world.

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