Member-only story
Q1 2025 Signals the Peak of China’s Coal Era
Despite rising electricity and steel demand, coal-fired generation dropped sharply thanks to rooftop solar and structural reforms.
China’s coal-fired electricity generation took an unexpectedly sharp turn downward in the first quarter of 2025, signaling a potentially profound shift in the world’s largest coal-consuming economy. This wasn’t merely a seasonal dip or economic distress signal; rather, it represented a clear and structural turning point. Coal generation fell by approximately 4.7% year over year, significantly outpacing the overall grid electricity supply decline of just 1.3%. However, electricity demand, a better measure, went up by 1%. What gives?
Notably, that modest decline in grid electricity supply wasn’t evenly distributed across the entire quarter — it was confined to two of the three months, where heating requirements were softened by warmer than average months in January and February. This detail matters, indicating that the reduction in coal-generated electricity wasn’t primarily driven by a widespread drop in economic activity or power use, but rather by underlying transformations in China’s energy supply.
Looking closer, the slight rise in coal usage within China’s steel sector reinforces this interpretation…
