China posts first annual drop in thermal generation since 2015

It dipped 0.7% in 2025.

China’s clean power generation met all growth in electricity demand in 2025, pushing thermal generation down 0.7% and marking the first annual decline in a decade, according to Ember.

Its China Energy Transition Review 2026, published on 8 September, said electricity demand rose 5% during the year, whilst strong growth in wind and solar generation covered the increase.

Thermal generation last fell in 2015, when electricity demand grew by about 0.5%.

Ember said the decline points to a shift in China’s energy system, with clean electricity beginning to take over functions held by fossil fuels.

“China’s energy transition is entering a more demanding phase, in which clean electricity begins to take over roles long held by fossil fuels across power generation, system balancing and the broader economy,” Ember said.

Coal generation has also remained flat on a rolling 12-month basis since early 2024, following years of continuous expansion.

The trend is visible across provincial markets, with coal generation flattening in 17 of the 26 provincial-level regions tracked by Ember between 2021 and 2025. These regions account for more than half of China’s thermal capacity.

The shift extends beyond power generation. China installed around 60% of the world’s new battery storage in 2025, with installations rising 84% year on year.

Average storage utilisation roughly doubled between 2022 and 2025, whilst compressed-air and molten-salt storage moved towards commercial deployment.

Industry is also increasing its use of electricity. Electricity supplies about three-quarters of final energy in light manufacturing sectors such as machinery, equipment and textiles.

Electrification is also gaining ground in metals smelting and processing and non-metallic minerals.

Transport is following the same trend, with electric vehicles accounting for about 67% of new passenger-vehicle sales by June 2026.

Electric truck sales more than doubled in 2024 and again in 2025, lifting their share of new truck sales to 26%, Ember said.

The transition is also becoming a larger part of China’s trade and economic activity. Clean technology exports surpassed $220b in 2025, approaching the scale of garments, furniture, and household appliances.

Ember estimates that clean energy investment, manufacturing, and supply chains generated $2.1t in economic activity during the year.

Ember said the transition faces challenges as China integrates more clean power, manages lower utilisation of its coal fleet, and addresses pressures including slower solar additions and curtailment.

“The test is not the scale of the challenges, but whether policy can adapt—and on that test, China’s toolkit is visibly evolving,” Ember said.

The report describes China’s shift as “building whilst breaking”, in which the country expands its clean energy system whilst reducing the role of the fossil-fuel system.