# Coal — the paradox that won't shrink

Coal supplies roughly **half of China's generation (49.7% in H1 2026; NEA data via Reuters, 30 Jul 2026)**
while its buildout keeps growing — the near-universal miss in "the buildout is all renewables" framing.

## First half of 2026: built for backup, contracted to run

Coal-only figures from the CREA / Global Energy Monitor plant tracker (not official statistics),
January–June 2026:

| Measure | H1 2026 |
| --- | --- |
| Commissioned | **30 GW** (+43% y/y; the highest first-half total since 2016) |
| Retired | **2.7 GW** (more than 10 GW built for every 1 GW retired) |
| Construction starts | **25.4 GW** |
| Newly permitted | **8.6 GW** (−63% y/y) |
| Permitted or under construction | **274 GW** (204 GW building + 70 GW permitted, not started) |
| Coal fleet utilisation | **~1,998 h** (2,056 h in H1 2025); coal generation +3.4% y/y |

Source: Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM),
[*Built for backup, contracted to run: China's coal support system risks crowding out clean power*](https://energyandcleanair.org/wp/wp-content/uploads/2026/08/CREA_GEM_China_Coal-power-review_H1-2026.pdf),
6 Aug 2026 · verified (report read).

### What the official statistics say

Official series count all thermal power (coal plus gas and other fuels), so they don't match the
coal-only figures one-for-one.

- **Thermal capacity added, H1 2026: 38.36 GW** — National Energy Administration (NEA) data via a
  [ChinaBaogao compilation](https://www.chinabaogao.com/data/202608/811764.html), 11 Aug 2026 · secondary.
- **Thermal generation, y/y (NBS, plants above designated size):**
  - January–June 2026 (cumulative): **+2.9%** — [ChinaBaogao compilation of NBS data](https://www.chinabaogao.com/data/202608/811755.html), 11 Aug 2026 · secondary
  - June 2026 (single month): **+0.5%** — [Xinhua Finance](https://www.cnfin.com/yw-lb/detail/20260715/4440690_1.html), 15 Jul 2026 · secondary
  - August 2026 (single month): **−4.3%** — [Xinhua Finance](https://www.cnfin.com/yw-lb/detail/20260915/4469929_1.html), 15 Sep 2026 · secondary
- **No January–August cumulative thermal figure** appeared in any release we could read, so none is
  given. The monthly figures show thermal output fell year on year in August; they do not show the
  direction over January–August.

### How Beijing describes coal's role

- **"Ballast stone" (压舱石), 20 Jun 2024:** an NEA official (Li Fulong, Development and Planning
  Department) told a State Council Information Office press conference that coal plays the role of a
  "ballast stone" in China's energy security. ([Xinhua Finance](https://www.cnfin.com/hg-lb/detail/20240620/4064376_1.html) · secondary)
- **"Backstop" (兜底保障), 10 Aug 2026:** the NDRC/NEA *Coal Industry Development Plan for the 15th
  Five-Year period* (NDRC Energy [2026] No. 979, signed 6 Jul 2026) says that by 2030 coal's backstop
  capacity is further strengthened and coal consumption peaks.
  ([plan PDF](https://www.ndrc.gov.cn/xxgk/zcfb/tz/202608/P020260810576358158489.pdf) · verified)
- The 2026 coal, energy-system and power-system plans use "backstop" and "basic energy"; "ballast
  stone" does not appear in them.

## Live pipeline (GEM)

**543 units · 366.5 GW** still being built or planned:

| Status | Units | GW |
| --- | --- | --- |
| Construction | 258 | 183.4 |
| Pre-construction | 216 | 130.8 |
| Announced | 69 | 52.4 |

Front-loaded to **2026 (56 GW, 77 units)**. Nearly all of it is **ultra-supercritical**
— the buildout is newer, larger, and more efficient than the fleet it replaces, which is
*why* coal's share of generation holds up: new coal is still added to back up and crowd
renewable supply. Market concentration: Shenhua, China Energy, Datang, Huadian, Huaneng.

Dated coverage on the pipeline is imperfect (~19%) — flagged honestly on the /coal page.

## Contract lock

Coal generators are still expected to sign annual contracts covering **60–70% of the prior year's
delivered electricity** in 2026 (CREA/GEM, H1 2026 review). That floor, plus the build above, is the
mechanism behind the absorption gap: the fleet keeps growing while each plant runs fewer hours.

## Capacity price (煤电容量电价)

As of 1 Jan 2024 (NDRC Pricing [2023] No. 1501), China pays coal plants for the **capacity they
hold**, not just the kilowatts they sell. Uniform fixed cost: **¥330/kW·yr**. In 2024–25 the
recovery level was split by province:

- **Most grids: ¥100/kW·yr** (~30% of fixed cost)
- **7 transition grids: ¥165/kW·yr** (~50%) — Henan · Hunan · Chongqing · Sichuan · Qinghai · Yunnan · Guangxi

**From 2026 every province must recover at least 50% of fixed cost (at least ¥165/kW·yr)** through
the capacity price, and may go higher where coal plants run few hours — NDRC/NEA *Notice on improving
the generation-side capacity price mechanism* (NDRC Pricing [2026] No. 114, signed 27 Jan 2026,
published 30 Jan 2026; read via the [CLS reprint](https://www.cls.cn/detail/2275613) and the CREA/GEM
review · secondary). The mechanism separates the "keep the plant warm for reliability" value from
energy market revenue — structurally **underwriting coal's continued presence** even as renewables scale.