Talk about a balancing act! China is setting global records in clean energy and electric vehicle adoption, but here’s the twist: it’s also ramping up coal production for energy security. It’s a fascinating paradox in the global energy transition. Can a nation truly lead the green revolution while still relying heavily on fossil fuels?
China stands at a fascinating crossroads in the global energy landscape, simultaneously leading the charge in clean energy advancements while paradoxically expanding its reliance on coal. The nation has indeed cemented its position as a powerhouse in the clean energy transition, evidenced by surging electric vehicle sales that now outpace conventional cars and unparalleled renewable investment in energy and storage solutions. Record-setting additions of solar and wind power capacity underscore its commitment to a greener future, with these sectors contributing a significant share to China’s recent economic growth.
This rapid embrace of green technology, however, has not been without its challenges. The booming clean energy sector has led to a significant overcapacity, sparking fierce price wars and a race to the bottom that has impacted numerous companies within the cleantech industry. Chinese authorities are now considering interventions to manage this excess capacity and ensure the quality of production, acknowledging that unbridled competition can hinder sustainable growth.
The push towards renewables and electric vehicles is already reshaping China’s conventional energy demands. A notable consequence is the apparent peak in demand for road transportation fuels, as electric and LNG-powered vehicles increasingly displace gasoline and diesel consumption. Major Chinese oil and gas state giants have reported in their recent earnings that new-energy vehicles are suppressing demand and sales of refined petroleum products, signaling a foundational shift in the national energy mix.
Despite its global leadership in the energy transition, China continues to prioritize energy security, which explains its sustained and even increased investment in coal power. The country commissioned as much as 21 gigawatts of coal power in the first half of 2025, marking the highest such capacity addition since 2016. Plans for approximately $54 billion more this year illustrate a strategic decision to ensure reliable electricity, aiming to avert the blackouts experienced in recent years, even as infrastructure for renewables expands.
The International Energy Agency (IEA) has highlighted China’s monumental role, identifying it as the world’s largest energy investor, spending twice as much as the European Union and nearly as much as the EU and United States combined. China’s clean energy investment nearly doubled since 2015, and remarkably, the nation achieved its 2030 wind and solar capacity targets six years ahead of schedule in 2024, demonstrating its formidable pace in renewable deployment.
However, the IEA also points to a deeper concern regarding China’s parallel investment in coal. While coal generation could theoretically serve as a backup to the expanding renewables, the sheer scale of investment in thermal power indicates a more profound reliance, driven by persistent apprehensions over electricity stability and energy security. This dual approach reveals a complex energy strategy balancing ambitious environmental goals with critical energy security imperatives.
Concurrently, China is accelerating the development of essential infrastructure to support its green transition. This includes a vigorous expansion of EV charging networks, large-scale energy storage projects, and extensive grid upgrades designed to absorb greater quantities of renewable energy. Officials anticipate exceeding the target for non-fossil fuel energy to account for 20% of all consumed energy by the end of 2025, now aiming for an even more ambitious 25% share by 2030.
Addressing the structural challenges arising from the renewable energy surge, particularly overcapacity in key clean energy industries, remains crucial for China’s continued energy transition. Authorities are increasingly committed to tackling cutthroat competition and low-quality manufacturing that have hurt domestic enterprises. These efforts are vital to ensure the long-term health and global competitiveness of China’s burgeoning clean energy sector.
This intricate energy landscape positions China as a critical player in global climate efforts, showcasing both unprecedented progress in clean energy and a pragmatic, yet environmentally challenging, strategy for maintaining energy security through conventional sources. The world watches to see how this dynamic balance will ultimately unfold and impact global efforts toward a sustainable future.
