The Coal Conundrum: China’s Green Energy Paradox

China’s rapid expansion of solar and wind power has been touted as a beacon of hope in the fight against climate change. However, beneath this progress lies a complex web of contradictions that threaten to derail it. A recent report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) highlights the “coal lock-in” phenomenon, where legacy policies favoring coal hinder the integration of renewable energy into China’s grid.

The statistics are stark: an estimated 360 terawatt-hours of solar and wind power were wasted between January and June 2026 due to curtailment. This waste is equivalent to powering Mexico or the United Kingdom for a year, based on 2025 consumption data. The sheer scale of this waste is a damning indictment of China’s energy transition.

Geography plays a significant role in China’s renewable energy puzzle. Most solar and wind power capacity is concentrated in remote northwestern provinces, while the majority of electricity demand is on the eastern coast. A lack of long-distance high-capacity power lines to move clean energy from these desert bases to the rest of the country is a major obstacle.

Policy protections also drive curtailment, as long-term contracts lock grid operators into buying minimum volumes of electricity from local coal plants – even when renewable energy is plentiful and cheap. These contracts mean that grid operators burn coal even when wind and solar output is abundant. This perverse incentive system rewards the status quo over innovation.

To address this issue, power market rules must be updated to reward genuine reliability and remove these minimum requirements for coal. CREA’s Qi Qin argues that coal power plants need to be required to step back when wind and solar output is abundant. This requires a fundamental shift in how China approaches energy policy – one that prioritizes flexibility over fossil fuels.

The coal lock-in phenomenon is part of a broader structural shift underway in China’s energy landscape. Clean energy growth means the era of simultaneous growth in coal and renewables is coming to an end. Coal’s share of China’s total power generation fell to 49.7% in the first half of 2026, marking the first time in modern history that coal supplied less than half the country’s electricity.

Despite these promising trends, Beijing continues to invest in new coal plants at a worrying rate. The report highlights how China is building new coal power plants faster than it is retiring old ones – adding 10 gigawatts of coal capacity for every gigawatt retired. This expansion stems from a wave of permits approved by local governments in 2022 and 2023, following the severe 2021 power crunch that affected 20 provinces.

The consequences of this “coal lock-in” are far-reaching. Burning coal is the single largest source of planet-warming CO2, and China’s continued reliance on it threatens to undermine global efforts to mitigate climate change. The report’s authors warn that unless policy changes, China will struggle to meet its ambitious carbon peaking targets.

As Beijing integrates clean energy into the grid – including plans to retool its power system over the next five years – one thing is clear: China’s green energy paradox demands a fundamental transformation of its energy policy. The country must prioritize flexibility, innovation, and sustainability over fossil fuels if it hopes to meet its climate goals.

China’s continued reliance on coal sets a concerning precedent for other countries watching its progress. As the world’s largest producer and consumer of coal, China’s challenges will have far-reaching implications for global climate policy – and it’s time to start asking tough questions about what this means for our shared future.