China’s Renewable Energy Capacity Surpasses Coal for the First Time

China is experiencing a significant transformation in its energy sector as wind and solar power have, for the first time, collectively surpassed coal in installed capacity. According to the latest data from the National Energy Administration (NEA), renewable energy sources have outstripped coal, marking a pivotal shift in the country’s energy landscape.

Rystad Energy’s projections suggest that by 2026, solar power alone will exceed coal as China’s primary energy source, with an anticipated cumulative capacity of over 1.38 terawatts (TW)—150 gigawatts (GW) more than coal.

This transition reflects China’s growing commitment to cleaner energy and a reduction in reliance on fossil fuels. Historically, coal enjoyed a substantial lead with around 50 GW of annual installations before 2016. However, recent investments in renewable energy have significantly altered the landscape. Since 2020, annual installations of wind and solar energy have consistently surpassed 100 GW, three to four times the capacity additions for coal. Last year, China set a record with 293 GW of wind and solar installations, driven by large-scale renewable hub projects.

Conversely, the coal power sector has been declining. Last year, approximately 40 GW of new coal power was added, but this dropped dramatically to 8 GW in the first half of 2024. The Chinese government has introduced stricter regulations on new coal projects as part of its carbon reduction goals. Measures now focus on phasing out smaller coal plants, upgrading existing facilities to cut emissions, and enforcing stricter standards for new coal projects. Consequently, the gap between coal and clean energy capacity additions has widened significantly, reaching a 16-fold difference in the first half of 2024.

Simeng Deng, Senior Analyst at Rystad Energy, highlighted the significance of this shift: “We’re at a crucial juncture for China and the global energy transition. With strong renewable energy project pipelines, China is poised to move beyond its status as the world’s largest greenhouse gas emitter and energy consumer. Solar energy will play a central role in this transformation, potentially establishing China as a leader in clean energy.”

Wind power, introduced in China in the early 2000s, has seen substantial growth. By 2011, China had installed 17.6 GW of onshore wind capacity. This figure grew steadily to 30 GW annually from 2011 to 2019, with offshore wind developments starting in 2018. The sector saw a record 71 GW of new installations in 2020, driven by the need to secure subsidies before their phase-out. After a temporary decline, wind capacity rebounded with 75 GW of new additions last year and 25 GW in the first half of this year, with forecasts suggesting an additional 50 GW in the latter half of 2024.

Solar photovoltaic (PV) capacity began making a significant impact in 2013 with 16 GW. Benefitting from cost reductions, annual installations grew to between 30 GW and 50 GW from 2016 to 2021. In 2022, China added 87 GW of PV capacity, leading to a record 216 GW last year. With 105 GW added in the first half of 2024, total new solar capacity is expected to exceed 230 GW for the year.

As China’s clean power capacity expands, it faces challenges such as low utilization rates and intermittency. Upgrading grid infrastructure to enhance transmission flexibility and storage capabilities will be crucial. Battery storage will play a key role in maintaining grid stability, ensuring that the growing reliance on clean energy meets the demands of a growing population and national targets.