China’s Clean Power Revolution: From Coal to Carbon Neutrality

Asia & The PacificElectric Vehicles (EV)Long-Term Energy Storage

Imagine a nation where clean electricity not only powers homes but also drives factories and trucks, replacing the old coal engine. That’s China’s 2026 reality.

TL;DR
• China’s clean power now meets all electricity demand, reducing coal generation for the first time in a decade.
• Battery storage and electrification of heavy industry and trucks are accelerating, reshaping global fossil fuel demand.
• Policy shifts toward market-based renewables and carbon controls are sustaining momentum and boosting clean-tech exports.

Summary
China’s clean‑energy transition has entered a "building while breaking" phase, where renewable generation, storage and electrification are beginning to replace functions traditionally performed by coal and oil. In 2025 clean power satisfied all electricity‑demand growth, coal output fell for the first time in a decade, and battery storage accounted for 60% of global new capacity, signalling a shift toward a more resilient, adaptable grid.
• Prioritise market‑based pricing for new renewables to align investment with system value and reduce curtailment risks.
• Accelerate deployment of longer‑duration storage (compressed‑air, molten‑salt) to provide flexible balancing as variable renewables scale.
• Expand renewable‑consumption mandates for high‑intensity industries and establish green‑certificate accounting to drive deeper electrification.
• Deploy targeted transition funds and policy support for coal‑dependent provinces to diversify economies and repurpose assets.
• Scale export‑oriented clean‑technology manufacturing to capture early‑stage revenue and reinforce economic growth.

Clean electricity now meets 5% annual demand growth, pushing thermal generation down 0.7% while overall electricity use rose 5%. Battery storage installations surged 84% in 2025, overtaking pumped hydro and doubling utilisation cycles, while compressed‑air and thermal storage moved from demonstration to commercial projects, broadening the flexibility toolkit. Industrial electrification has advanced beyond light manufacturing into metals smelting and non‑metallic minerals, with electricity’s share of final energy use climbing to 28.8% in 2024, outpacing many advanced economies.

Transport electrification has expanded from passenger vehicles (67% of new sales by mid‑2026) to heavy trucks, which reached a 26% sales share in 2025—matching European passenger‑EV penetration. This shift displaces roughly 1 million barrels of oil daily, creating a strategic demand‑side buffer against import shocks. Concurrently, clean‑technology exports exceeded $220 billion in 2025, approaching the scale of China’s traditional "old three" sectors, and the clean‑energy economy generated an estimated $2.1 trillion in activity, rivaling major coal‑producing provinces.

Policy adaptation is evident: Document No. 136 (2025) moved renewables from guaranteed feed‑in tariffs to market‑based pricing, while new CfD‑type mechanisms stabilize revenues. Dual‑control targets now focus on carbon intensity, and renewable‑consumption responsibilities bind provinces and heavy‑industry users to specific clean‑energy quotas. Support for coal‑dependent regions has broadened from resource‑depletion relief to systemic diversification, including a proposed national low‑carbon transition fund. These measures aim to sustain rapid clean‑energy expansion, deepen system integration, and manage legacy coal assets, ensuring the transition remains on a trajectory that can accommodate future technological shifts and economic disruptions.

Will other nations follow China’s path, turning clean electricity into the engine of growth and security?