From baseload to flexibility꞉ How coal’s role in China is changing

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From baseload to flexibility: How coal’s role in China is changing

China is shifting its coal fleet from baseload generation to flexibility support, with full retrofitting expected by 2027; continued market reforms and the growth of clean flexibility are essential to a renewable-dominant grid.

10 Feb 2026

28 Minutes Read

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Biqing Yang
Energy Analyst, Asia
Ember

Executive summary

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Setting the Scene – Coal flexibility in China: context, drivers, and policy evolution

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1.1

The driver: Coal as a pragmatic transitional tool to China’s mounting short-term flexibility needs

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1.2

Government policy is locking in coal’s new role

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1.3

Mechanisms in support of the transition

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1.4

Technical pathways of flexibility retrofit in China

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Measuring the Impact – China’s coal fleet is becoming more flexible, but much of its potential remains untapped

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2.1

Progress on retrofitting the existing coal fleet

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2.2

Changing patterns in the use of coal power

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2.3

Coal utilisation pattern fluctuates more seasonally in recent years

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2.4

Economic constraints related to coal power’s role shift

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Discussion – Unleashing coal’s flexible potential while easing the transition to cleaner solutions

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3.1

Beyond coal: clean flexibility must take the lead

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3.2

Further power market reform as the key to unlock flexibility

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3.3

Conclusion: from coal-led flexibility to a clean, market-driven system

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Supporting materials

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Highlights

100%

China is on track to retrofit its entire existing coal fleet for flexibility in the next two years.

Monthly variance of current coal capacity utilisation is twice that of 2016, when the utilisation was at a historical low point.

2027

As coal retrofits potential plateaus by 2027, battery energy storage must scale up.

About

As wind and solar installed capacity expands rapidly, the need for power system flexibility is becoming increasingly urgent. To meet this demand, China is strategically repositioning its coal fleet from being a baseload generator to a source of system flexibility.

This report dives into the policy mechanisms supporting this shift, as well as its technical and economic realities. The analysis highlights that China’s coal fleet is on track to be fully retrofitted for flexibility by 2027, and the utilisation pattern of coal power is changing. Meanwhile, the findings underscore the urgent need to scale up clean flexibility solutions to accommodate renewable energy growth, improve system efficiency and avoid locking in emissions beyond 2030.

Executive summary

China has largely retrofitted its coal fleet, but systemic challenges constrain full flexibility

As China enters the 15th Five-Year Plan (FYP), the final planning cycle before its 2030 carbon peaking target, its energy transition is in a decisive phase. Rapid wind and solar expansion is shifting the power system’s structure, gradually pushing coal from its traditional baseload role towards being a system flexibility provider. This shift is driven by both system flexibility needs and deliberate policy design. In response, China’s vast coal fleet is becoming as flexible as possible following rapid retrofitting during the 14th FYP period.

Over the past decade, the Chinese government has been repositioning coal’s role through strategies, mandates and financial incentives.

This analysis finds that China is on track to make its entire coal fleet flexible by 2027. However, completing retrofits also implies that the physical flexibility reserve of existing coal capacity will be fully realised within the next two years. Meanwhile, upfront capital investment, costs associated with flexible operations and lower electricity sales resulting from reduced utilisation continue to bring in pressure on coal power plants.

Clean technologies, particularly battery energy storage, provide significantly better technical performance in flexibility. If the deployment of clean flexibility fails to match the pace of renewable expansion, the system risks relying on additional coal capacity to fill the gap, increasing the risk of reduced efficiency and locking in emissions beyond 2030. China has installed nearly half of the world’s battery energy storage and has demonstrated strong recent growth, showing great potential in meeting its flexibility needs with non-fossil sources.

Ongoing efforts to reform the power market and improve system operations are moving in a positive direction. Effective design and implementation will be critical to unlocking any remaining flexibility potential and maintaining system stability as renewable energy accelerates.

As China enters the 15th Five-Year Plan period, it enters the final planning cycle before its 2030 carbon peaking target. Shifting coal towards a flexibility role can fill in the gap in system support needed as renewables expand, while gradually reducing its strategic importance in the bigger picture. However, this approach only works if clean flexibility scales up in parallel. The 15th Five-Year Plan period will be critical in avoiding further addition of coal capacity and locking in extra emissions.

Biqing Yang
‍Energy Analyst, Asia, Ember

China’s coal fleet is transitioning from a baseload workhorse to a provider of residual flexibility and system stability. But this shift is only part of a much bigger structural change underway in the power system. As power markets become more flexible and battery storage and other clean flexibility solutions scale up, the system will rely less and less on coal to do the balancing. Over time, these changes will offload coal from its flexibility role as well, opening the door for its gradual retreat and a cleaner, more flexible power system.

Dr Muyi Yang
‍Senior Energy Analyst, Asia, Ember

Key takeaways

Coal’s role in China is strategically changing

Over the past decade, China’s coal policy has gone through a progressive shift: coal is increasingly defined by system flexibility and security rather than being a baseload provider, as wind and solar become dominant pillars and gas power remains a smaller role in the electricity mix.

China’s coal fleet will be fully flexible by 2027

Steady progress in retrofitting over the past five years has exceeded the original 2025 target, with 360 GW of coal power completed as of the third quarter of 2024. This positions the country to meet its 2027 goal of maximising flexibility across the existing fleet.

The utilisation pattern of retrofitted coal plants is changing

China’s average coal utilisation rate has declined by more than 20% over the past two decades. Following a brief post-pandemic increase, in recent years, coal utilisation has resumed its decline. Its current utilisation rate varies more seasonally than it did during its 2016 low period, signalling an early sign of structural shift.

As coal retrofits peak, clean flexibility must scale up

As most of China’s existing coal fleet completes retrofitting by 2027, the potential for further flexibility upgrades will be largely exhausted. Sustaining renewable integration while reducing reliance on underutilised new coal capacity will require a rapid scale-up of clean flexibility sources, particularly battery energy storage.

Power market and operation reforms are key to unleashing flexibility

To integrate untapped flexibility capacity, the government must continue to reform power market design, dispatch practices and system operations. The upcoming 15th Five-Year Plan (FYP) period will be crucial for establishing the country’s unified national power market.

Next Chapter

1: Setting the Scene - Coal flexibility in China: context, drivers, and policy evolution