China burns more fossil fuels for power as coal production slips
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Thermal power generation rose 3.1 per cent in April 2026 compared to a year ago, while domestic benchmark thermal coal prices rose 23 per cent since the start of 2026.
PHOTO: GILLES SABRIE/NYTIMES
China’s thermal power generation grew for a fourth straight month in April even as coal output fell, highlighting the challenges Beijing faces in continuing to buffer its economy from the global energy crisis stemming from the war in Iran.
Thermal power rose 3.1 per cent in April from 2025 to help meet growing demand while output from wind turbines and nuclear reactors fell. Coal production declined 1 per cent during a month typically associated with seasonal maintenance.
China entered 2026 with coal stockpiles ample enough to be considered a glut, but the war in Iran is shifting those calculations.
The de facto shutdown of the Strait of Hormuz has choked off about a fifth of the world’s liquefied natural gas supply, and China has sharply reduced imports of the fuel given the resulting rise in prices. That has put more pressure on coal to make up the bulk of thermal power generation.
Domestic benchmark thermal coal prices have risen 23 per cent since the start of 2026. Power plants have been instructed to stock up on the fuel ahead of summer demand season, according to the China Coal Transportation and Distribution Association.
Still, the rally has lost steam recently as utilities push back against rising costs, and traders said they’re concerned about the possibility of government price caps if levels get too high.
At the same time, clean power is failing to show the same steady growth that helped China lower fossil fuel power output in 2025 for the first time in a decade.
The country simply has not been windy enough in 2026, and wind power output was 5 per cent lower in April than it was in 2025 despite record additions of new turbines in the ensuing period. Nuclear generation was also lower as plants were shut for maintenance, while utility-scale solar and hydropower output grew.
The poor performance of renewables is especially alarming because additions of new turbines and panels are down sharply from record growth in 2025.
Curtailment is also on the rise, and grid operators are racing to build power lines and battery storage plants to spread out the clean electricity over more hours of the day. BLOOMBERG
