China’s coal shift from baseload to backup is nearly complete, clean solutions must scale up fast

Paris, 10 February – China is on track to meet its national target of retrofitting almost its entire existing coal power fleet for flexible operation by 2027, marking a decisive shift in coal’s role within the power system, according to a new report by Ember. The upgrades signal coal’s transition from a constant baseload provider to a system-balancing resource operating to support the integration of variable renewable energy.

China has already made substantial progress in upgrading coal plants to operate more flexibly, responding to the rapid expansion of the variable wind and solar. By the third quarter of 2024, 360 GW of existing coal capacity had been retrofitted for flexibility. When combined with newer coal units designed with greater operational range, total flexible coal capacity exceeded 600 GW by the end of 2024. Current policy signals indicate that retrofit potential across the existing fleet will be largely realised within the next two years.

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As China enters the 15th Five Year Plan (2026–2030), the final planning cycle before its 2030 carbon peaking target, the function of coal is undergoing structural change. In 2024, China’s wind and solar installed capacity surpassed that of coal, intensifying the need for flexibility resources capable of responding to variable generation and rising seasonal demand peaks.

“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.” Said Dr. Muyi Yang, Senior Analyst at Ember.

China has rolled out a comprehensive set of policies at both national and provincial levels, setting and raising targets, establishing standards, launching pilot demonstrations, and introducing support measures, notably the coal capacity pricing mechanism.

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.

Dr Muyi Yang
‍Senior Energy Analyst, Ember

The analysis shows that coal utilisation patterns are changing in ways consistent with this transition. Seasonal variance in coal use is now roughly twice the level seen during the previous utilisation low point in 2016-2018, indicating that coal plants are increasingly operating as balancing resources rather than constant generators. After a brief increase during the post-pandemic recovery and energy security pressures, coal plants are once again running for less and less of the time.

However, the report highlights that the scope for further gains from coal retrofitting is finite. Once upgrades across the existing fleet are completed, additional flexibility potential will be limited. Flexible operation also brings higher operating costs, including increased fuel consumption at lower load levels, higher maintenance requirements and reduced electricity sales due to declining utilisation rates. Without sufficient deployment of clean flexibility technologies, the system risks turning to additional coal capacity to fill emerging gaps, increasing the likelihood of locking in emissions beyond 2030.

Market design will play a decisive role in determining the outcome.The report finds that significant portions of coal’s physical flexibility remain underutilised due to dispatch practices and the need for further market reforms. Progress toward establishing a unified national power market by 2030, alongside deeper integration of spot and ancillary service markets, will be critical to unlocking flexibility across technologies and regions.

According to the IEA estimates, nearly 60% of China’s flexibility needs in 2030 could be met by non-fossil resources. Battery energy storage is expanding rapidly, with 144.7 GW installed by the end of 2025, an 85% year-on-year increase. Accelerating this deployment will be essential as renewable capacity continues to grow toward long-term targets.

The report concludes that the 15th Five Year Plan period represents a critical window. Sustained power market reform, improved system operation and accelerated clean flexibility deployment will be necessary to ensure that businesses and households can fully benefit from the declining costs of solar and wind, while maintaining system reliability during the transition.

“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.” Said Biqing Yang, Energy Analyst at Ember.

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.

Biqing Yang
‍Energy Analyst, Ember

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Ember is an independent energy think tank that aims to accelerate the clean energy transition with data and policy. It creates targeted data insights to advance policies that urgently shift the world to a clean, electrified energy future.

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China’s coal shift from baseload to backup is nearly complete, clean solutions must scale up fast

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