In 2025, China's power sector achieved a significant milestone: for the first time in a decade, electricity generation from fossil fuels decreased. This shift occurred despite overall power consumption reaching a new record, highlighting the accelerated adoption of renewable and low-carbon energy sources in the world’s largest electricity market.According to data from China’s National Bureau of Statistics (NBS), thermal power generation, which is primarily coal-based with a smaller percentage derived from natural gas, decreased by 1% in 2025, resulting in a total of 6.29 trillion kilowatt-hours (kWh). While this drop may seem small, it is historically significant as fossil-fuelled power generation has increased every year for the past decade. The decline became more noticeable towards the end of the year, with thermal power output falling 3.2% compared to the previous year in December.
This reflects a structural change in China’s energy mix, driven by significant investment in renewables and other non-fossil energy sources. Analysts say this transition is becoming increasingly difficult to reverse.
Renewables Meet Rising Electricity Demand
The decline in thermal power is especially notable because it happened at the same time as strong growth in electricity demand. China’s total power consumption rose by around 5% in 2025, surpassing the 10 trillion kWh mark for the first time. According to the National Energy Administration (NEA), total electricity usage reached approximately 10.4 trillion kWh, surpassing the combined consumption of the European Union, Russia, India, and Japan in 2024.
Growth in demand has been fuelled by various factors, including the rapid expansion of internet and data services, the increasing manufacture of electric vehicles, and the broader trend of industrial electrification. In previous years, rising demand would typically mean higher coal and gas generation. However, in 2025, most of the additional electricity came from clean and low-carbon sources.
China’s substantial investment in renewable energy in recent years is now having a visible impact on the power generation mix. Wind and solar capacity additions have accumulated to the point where they can cover much of the country’s additional electricity demand. Consequently, fossil-fuelled power plants are being pushed out of the growth picture. Power demand growth in 2025 was also slightly lower than in 2024, which limited the need for additional coal generation. According to analysts, demand growth decreased to around 5%, compared with almost 7% the previous year.
Hydro and nuclear power reinforce the low-carbon mix.
In addition to wind and solar power, other non-fossil energy sources also played a significant part in reducing China’s dependence on thermal power. According to NBS data, hydropower generation increased consistently throughout 2025, rising by 2.8% over the entire year and by 4.1% in December itself. This provided valuable support to the power grid, particularly during periods of variable wind and solar generation.
Nuclear power also recorded significant growth, reinforcing China's low-carbon energy supply. Nuclear generation increased by 7.7% in 2025, with an increase of 3.1% year-on-year in December. As China continues to expand its nuclear fleet, these plants are helping to keep emissions lower than coal-fired alternatives and stabilize the grid.
It is important to note that different datasets show slightly different results for total power generation. NBS figures showed that overall electricity generation reached 9.72 trillion kWh in 2025, marking a 2.2% increase from the previous year. However, these figures exclude some smaller-scale renewable projects, particularly solar projects, due to survey thresholds. NEA statistics provide a more comprehensive overview of total power consumption and renewable energy production.
Coal remains significant, though the tendency is changing.
Despite the fall in fossil-fuelled power generation, China’s coal sector remains highly active. Domestic coal production reached a record high in 2025, reflecting Beijing’s ongoing commitment to ensuring a stable and secure energy supply. Furthermore, coal-fired power plants continue to play a key role in providing power at all times and balancing the grid, particularly during periods of low renewable energy generation due to severe weather conditions.
Recent data highlights this variability. While wind and solar output increased significantly in some months, with wind generation rising by over 20% year-on-year in late 2025 and solar output by more than 20%, in other periods, performance was weaker. This weather dependency means that coal and gas plants are still needed as backup.
However, analysts agree that the long-term direction is clear. With renewables expanding rapidly and power demand growth becoming more stable, it is unlikely that thermal power generation will strongly rebound in 2026. Experts describe the current shift as structural rather than temporary, suggesting a gradual but permanent transformation of China’s power system.
The 2025 data indicates that China is making real progress in reducing carbon emissions from its power sector, with the aim of reaching its target of peak carbon emissions by 2030. Although coal still plays a role in the energy mix, clean energy is now clearly emerging as an effective solution to the country's growing electricity demand.
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