Coal-fired power's share in Chinese mix to plunge to 52% in 2026

Down from the previous estimate of 67%.

The share of coal-fired power in China's generation mix will fall to 52% in 2026, down from an estimated 67% in 2016, as government coal-curbing measures will bear fruit over the coming decade, according to BMI Research.

Strong growth in natural gas, nuclear and non-hydro renewable energy will offset the decline in coal. China's efforts to reduce pollution through the curbing of coal consumption continue unabated.

The Chinese government's focus on reducing both coal production and the consumption of coal in the power sector has been evidenced over the last six months through multiple assertive actions.

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These include the announcement of the planned closure of small and 'outdated'/'inefficient' coal mines across the country, limits on the construction of new coal-fired power facilities and the cancellation of coal power projects already under construction.

Although we have seen provincial-level resistance rise against the centralised government's efforts to reduce coal consumption and production, we expect the Chinese government to register success in reducing coal's share in the power mix over our 10-year forecast period.

As such, we forecast coal power will account for 52% of the generation mix in 2026, down from an estimated 67% in 2016. In fact, we believe coal-fired power generation has already peaked (in 2013/2014), and will not return to those same levels over our 10-year forecast period.

Offsetting this decline in coal-fired power generation will be strong growth in natural gas, nuclear and non-hydro renewable energy, albeit from a lower base.