The Ongoing Battle Between Dirty and Clean Energy in China: Looking Ahead

In this article we examine China’s apparent reluctance to abandon coal-fired power, amid mounting international pressure to lead in tackling climate change.

In the course of building a large coal plant every two weeks, China has been on the receiving end of strong criticism from around the world for ignoring the message put forward by the Intergovernmental Panel on Climate Change (IPCC) ahead of last month’s COP25 summit, which called for no future coal plants to be built anywhere in the world ever again.

At first glance, this rate of growth may appear alarming: the UK only has five coal-fired power stations still in operation, whilst the plants China is building now, or plans to build in the near future, amount to the EU’s entire coal fired fleet.

Nevertheless, China’s continued apparent keenness on coal could actually signal its final dying gasp as a key energy source, one which is thriving only temporarily mainly as a result of ineffective regulation rather than as a brazen affront by China to its international climate change objectives.


Renewable sources account for nearly 40% of China’s electric power capacity, with China’s renewable investments thought to account for 45% of the world’s total. Last year alone, China added 44.3GW of solar capacity, a very significant chunk of the 104GW world total.

In recent years, the Chinese state has sought to reduce the level of subsidies paid to the Solar PV market, instead attempting to support renewables by moving to an auction system. This would appear to mimic a successful trend seen in countries such as Norway and Finland, which have remained popular for investment despite a move away from subsidies.

The Global Commission on the Geopolitics of Energy Transformation also recently remarked that China is ideally positioned to become the world’s renewable energy superpower. Certainly, China has emerged as the leading renewable energy innovator, holding 150,000 of all renewable energy patents, 29% of the world’s total and well-ahead of the 100,000 held by the US.

Increasing Capacity

Despite striving to increase its capacity, some estimate that China’s use of coal will actually reach a peak in 2020, whilst there is also evidence that the recent ‘boom’ may be unintended and temporary.

At the time that China’s market reforms were instigated in the 1980s, being rich in coal reserves and in need of securing an energy source to fuel a rapid economic turnaround, the central government was responsible for approving each new coal fired power station. The construction of these were eagerly encouraged, yet Beijing could also ensure that total capacity increased in line with total demand.

With the intention of making the approval cycle more efficient, provincial governments were permitted to approve new power stations themselves from the end of 2014. Within a year of this change, amid an eagerness to boost local economies, the capacity of newly approved coal power stations had increased three-fold.

In 2016 these rules were largely reversed, with the central government ordering a halt to the construction of many recently approved plants. Nevertheless, recent analysis of satellite imagery by Coalswarm, an environmental research group, indicates that hundreds continue to be built.


The future of energy in China will largely depend on the contents of the Central Government’s forthcoming five-year plan, which will last between 2021 and 2025.

A state run think-tank, the National Center for Climate Change Strategy and International Cooperation (NCSC), has argued for a strict cap on China’s overall greenhouse gas emissions, noting the need to ensure that Carbon Dioxide emissions are capped at 10.6 gigatons by 2025 and 20% of China’s energy mix is derived from non-fossil fuels.

Despite this, the current Chinese Head of Government, Li Keqiang, has taken a softer stance on the need for a shift away from Fossil Fuels as recently as October. Despite an ‘acceleration’ of renewable energy being central to the 13th five-year plan that is currently active, he has now called for China to exploit its ‘coal endowment’.

As China looks to balance its economic development with its international obligations, the former having slightly slowed as of late, it is increasingly hard to predict the recommendations they will take serious and consistent notice of.

About the Author

Prospect Law is amulti-disciplinary practice with specialist expertise in the energy andenvironmental sectors with particular experience in the low carbon energysector. The firm is made up of lawyers, engineers, surveyors and financeexperts.

This article remains thecopyright property of Prospect Law Ltd and Prospect Advisory Ltd and neitherthe article nor any part of it may be published or copied without the priorwritten permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on

For a PDF of this blog click here



Prospect is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, insurance and risk management specialists, and finance experts.

This article remains the copyright property of Prospect Law Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.