In the realm of global coal power capacity construction, China asserted its dominance by singularly spearheading 96% of the initiatives last year, firmly solidifying its status as the primary contributor to coal expansion worldwide. The nation's influence extended further, accounting for 68% of newly established coal generation capacity in the same period and overseeing 81% of newly proposed coal generation projects. This overwhelming presence underscores China's pivotal role in shaping the global landscape of coal energy infrastructure.

China's steadfast commitment to coal has been a source of contention, especially for regions like Europe and advocates of energy transition. However, Beijing has consistently emphasized that, on its list of priorities, energy security takes precedence over energy transition. Officials have underscored that the majority of the newly added coal capacity is intended to function as a backup for intermittent renewable sources such as wind and solar. Unlike coal power plants, these renewable sources face challenges in generating electricity consistently throughout the day.

Furthermore, China achieved a record-breaking coal production figure last year, reaching 4.66 billion metric tons, marking a 2.9% increase compared to the output in 2022. Data from the National Bureau of Statistics, disclosed last month, highlighted the nation's robust coal production performance. The surge in domestic coal prices and heightened demand following the lifting of COVID restrictions contributed to a notable uptick in coal imports. China experienced a substantial 61.8% year-on-year surge in coal imports, reaching 474.42 million metric tons in 2023.

During the latter part of 2023, China escalated its efforts in coal and natural gas production, imports, and consumption. This surge was prompted by a significant increase in electricity demand in the second half of the year, culminating in a record-high winter peak demand. The nation strategically responded to the escalating demand, ensuring a robust supply chain to meet the energy requirements.

While the current trajectory indicates a decline in China's coal demand for the upcoming year, the expectation is for it to plateau through 2026. Globally, coal demand is projected to decline until 2026. China's future in the coal sector will be influenced by the pace of its wind and solar infrastructure development over the next few years. Additionally, structural economic factors will also contribute to shaping China's trajectory in the coal industry.

China's robust and strategic approach to coal production and consumption reflects its commitment to addressing energy security needs and sustaining economic growth. The nation's reliance on coal as a backup for intermittent renewables emphasizes the practical challenges associated with transitioning entirely to renewable energy sources. As China navigates its energy landscape in the coming years, its decisions and actions in the coal sector will undoubtedly have far-reaching implications, influencing both domestic and global energy dynamics.