China's coal-fired power generation is expected to rebound in 2026, reversing the first annual decline in coal-based electricity production seen in more than a decade. The turnaround highlights the growing challenge of balancing energy security with climate commitments as electricity demand continues to rise across the world's largest energy-consuming nation.

Analysts forecast an increase in electricity production from coal sources at about 1.5% to 2% in the current year, hitting nearly 5.4 trillion kilowatt-hours. An increase in coal use for generating electricity is forecast to be about 3%, as increased demand for electricity from industry and transport, as well as air conditioning.

There are multiple reasons why there is renewed reliance on coal once again. The first factor is the presence of very bad weather conditions because of the presence of El Niño, resulting in increased demand for electricity because of the increased use of air conditioners in the long-lasting heat waves. Additionally, less wind and solar power generation along with fewer installations of renewables compared to last year has contributed to this trend.

The global uncertainty in the energy market has also played a major role in the choice of fuels for China. With higher prices and supply risks associated with geopolitical issues in the Middle East, using coal for producing electricity becomes relatively more secure and economical. Having vast amounts of domestic coal deposits has only added to the advantage of coal.

Despite the rise in coal-based power generation, China is still expanding its renewable energy sources at an unprecedented rate. The country has exceeded its target of 1,200 GW of total wind and solar power ahead of schedule and has already set itself another target of producing 50% of its energy from non-fossil sources by the year 2030. Huge investments in solar, wind, hydro, nuclear power, and grid improvements continue to play a key role in the country’s decarbonisation strategy.

Energy experts note that coal is now not just used as a source of base-load power but also as an alternative power resource. This is because coal power stations are now being retrofitted to provide back-up for the grid in case of fluctuations in renewable power generation due to the technical difficulties associated with incorporating huge amounts of clean power.

In this sense, the energy transition in China is a mixed bag. In spite of the fact that the growth of renewable energy capacity and climate targets have remained the same, the temporary nature of energy security worries in the short term means that the current dependency on coal has risen. The future path of emissions in China is expected to depend on several factors.