China's Coal-Power Conundrum: Navigating Energy Demands Amidst Decarbonization Efforts

Despite expectations of peaking, China's coal-powered thermal generation increased by 1.5% in 2024, amid lower hydropower output and rising demand. Analysts point to challenges in power sector decarbonization, though forecasts suggest renewable power could meet 2025's new demand growth, helping China reach peak emissions.

Coal-powered thermal generation in China rose by 1.5% in 2024, defying predictions of a peak. The growth, although the slowest in nine years absent the COVID-19 pandemic years, underscores challenges in reducing coal reliance while accommodating the country's growing power demands for industrial and electrification purposes.

Power emissions are crucial in China's decarbonisation strategy amidst its economic shift towards electrification, including electric vehicles. Last year's thermal power output of 6.34 trillion kWh was driven by high demand, even as December numbers showed a decrease, and came amid unexpectedly low hydropower generation and a record-setting hot summer.

While analysts attribute full-year growth to reduced hydropower output and high temperatures, future forecasts suggest that renewables may suffice for upcoming power demand. Greenpeace anticipates this would allow China's power sector to reach peak emissions by 2025, aligning with broader decarbonization goals.

(With inputs from agencies.)