Global Coal Power Capacity Rises While Generation Declines in 2025

Global Trends in Coal Power: Capacity vs. Generation

In 2025, the world observed a paradox in its energy landscape: a substantial increase in coal power capacity alongside an overall reduction in its utilization. While the planet commissioned more coal-fired plants, the actual generation from this highly polluting fuel decreased globally by 0.6% compared to the previous year. This trend was revealed in a recent report by Global Energy Monitor (GEM), an organization that has meticulously tracked coal power developments for over a decade. The only major economy that significantly bucked this trend by increasing its coal power generation was the United States.

The global decline in coal generation is largely attributed to the increasing affordability and omnipresence of renewable energy sources. Solar and wind power are now capable of satisfying a growing portion of electricity demand across much of the world, offering cleaner alternatives to fossil fuels.

Asian Giants Spearhead Capacity Expansion Amidst Generation Dips

Despite the observed decrease in generation, overall coal power capacity — encompassing newly activated or commissioned plants — saw a remarkable 3.5% jump in 2025. A staggering 95% of this new capacity originated from China and India, the world's top and third-largest emitters respectively.

China's coal capacity expanded by 6% last year, yet its coal-powered electricity generation simultaneously dropped by 1.2%. This divergence is partly due to the nation's burgeoning renewable energy sector. Similarly, India experienced an almost 4% growth in capacity, with its generation falling by nearly 3%. Christine Shearer, project manager of GEM's Global Coal Plant Tracker and author of the report, highlighted that in both countries, many leading provinces and states in coal development are also major coal-producing regions. She noted to AFP that these regions possess "strong industrial incentives to keep building coal."

The United States' Unique Trajectory and Europe's Dilemma

While most of the world saw generation declines, the United States actively increased its reliance on coal. "US coal-fired generation rose by more than 80 TWh (terawatt hours) year-on-year, a figure so large that no other country came close," Shearer stated. She attributed this surge not merely to demand growth but to "a policy environment that actively encouraged it."

Globally, the retirement of existing coal power plants also slowed significantly in 2025. Approximately 70% of units slated for decommissioning remained operational. In Europe, many of these missed retirement targets were a direct consequence of decisions made during the 2022-23 energy crisis, which was triggered by Russia's invasion of Ukraine. In contrast, the delays in the US were linked to government initiatives supporting coal.

Underlying Factors and Future Outlook

For China, coal is viewed as a reliable buffer against the intermittent nature of renewable energy, a perspective reinforced by past power shortages. India, the world's most populous nation, is heavily dependent on coal to meet its surging electricity demands. However, infrastructural challenges play a significant role in coal's persistence. Despite non-fossil fuels constituting 50% of India's installed capacity, infrastructure and other issues mean coal still generates approximately three-quarters of the country's electricity.

The energy crisis stemming from the US-Israeli conflict with Iran also prompted some countries to revert to coal, reactivating idle units or postponing retirements. In China, coal-fired power generation initially rose in 2025 due to "underperformance" by wind and nuclear. Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air and a contributor to the GEM report, noted the "oversupply and favouritism of coal power is an important factor." Despite recent figures suggesting a potential drop in China's coal generation, Myllyvirta emphasized to AFP that "the problem of excess coal capacity and entrenched favouritism of coal in the grid remain."

Looking ahead, global coal-fired generation has seen a modest 0.3% increase thus far in 2026, while wind and solar generation have experienced a substantial 10% jump. Shearer concluded that "Clean energy is absorbing most of the world's new electricity demand, with coal barely growing at all," indicating a shift towards cleaner energy despite persistent coal infrastructure development.