The key underpinning factor was the renewable energy boom. According to International Renewable Energy Agency (IRENA), the average annual commissioning of wind and solar power plants in China grew from 9.6 GW in 2011-2015 up to 24.1 GW in 2016-2020 and 57.3 GW in 2021-2023. One of the contributing factors was reduction of technology costs: thus, the average global cost of solar panels commissioning decreased seven times during the period from 2010 to 2023, i.e., from USD 5,310 down to USD 758 per 1 KW. The costs of on-shore wind generators commissioning during the same period decreased by 49% (i.e., down to USD 1,160 per 1 KW), and for off-shore wind generators – by 48%, i.e., down to USD 2,800 per 1 KW. The levelized cost of electricity (LCOE) was decreasing simultaneously with the specific CAPEX: for solar panels LCOE decreased more than 10 times (down to USD 0.044 per 1 KW*h), and for on-shore and off shore wind generators – by 70% (down to USD 0.033 per 1 KW*h) and by 63% (down to USD 0.075 per 1 KW*h) respectively.
Development of the nuclear energy industry was another contributing factor. During the period from 1991 to 2010, 13 reactors with total 10.9 GW capacity were connected to the grid in China, and during the period from 2014 to date – 43 reactors with total 47.2 GW capacity. As of today, China is the global leader with respect to the pace of construction of nuclear power plants (NPPs). According to IAEA, by December 2024 there were 63 nuclear power units of net capacity 66.1 GW under construction across the world, and China accounted for 29 reactors of 30.8 GW. India occupying the second position in this list had 7 nuclear power units under construction at that moment of 5.4 GW cumulative capacity.
The growth of gas supplies to the Chinese market also resulted in rising competition between different types of fuel. According to Energy Institute, natural gas production in China grew 8.5 times between 2000 and 2023 (from 27.4 bcm up to 234.3 bcm). At the same time, China became the major consumer of the liquified natural gas (LNG): at the end of the previous year, China accounted for 16.5% of global LPG imports (90.3 bcm out of 548.7 bcm). As this type of feedstock became more affordable, it resulted in a surge of gas-fired generation. During the period from 2000 to 2010, gas-fire TPPs for 30 GW were commissioned in the country, and during the period from 2014 to date – almost for 107 GW.
All these shifts resulted in noticeable reduction of the coal-fired generation share. In 2010, coal accounted for 77% of total generation in the PRC, and in 2023 – for 61%; at the end of this year, this share will be below 60%. This does not mean China refuses from coal-fired generation per se: according to Global Energy, three quarters of the global capacity of coal-fired plants are currently being built in China. However, due to the RES and nuclear generation developing at a rapid pace, the role of coal in Chinese power generation will be decreasing.
