China’s clean-energy expansion is reaching a turning point as renewable electricity, battery storage and electric vehicles begin replacing fossil-fuel consumption rather than simply supplementing coal and oil.
Coal-fired generation has stopped growing across 17 of 26 Chinese provinces and regions, while fossil-fuel consumption has already peaked in eight of 11 industrial sectors, according to a new analysis from energy think tank Ember.
China Energy Transition Review 2026 from Ember indicates that the transition is being reinforced by investments from Chinese clean-energy manufacturers. JinkoSolar is targeting around 100 GW of integrated solar manufacturing capacity by the end of 2026, while China’s major solar manufacturers are rapidly expanding into battery storage as electricity grids require more flexibility to accommodate renewable power.
Together, these developments suggest China is moving from a decade of building clean-energy capacity alongside fossil fuels toward a phase where renewable power and electrification increasingly displace them.
China Thermal Generation Falls 0.7 percent as Electricity Demand Rises 5 percent
The strongest evidence of the transition can be seen in China’s electricity sector.
Thermal generation, predominantly coal-fired power, fell 0.7 percent in 2025 despite electricity demand increasing 5 percent.
The comparison with 2015 is important. Thermal generation also declined that year, but electricity demand increased only 0.5 percent. In 2025, clean electricity expanded fast enough to absorb strong incremental electricity demand while also reducing the requirement for thermal generation.
Coal generation has stopped growing in 17 provinces and regions, including industrial centres such as Shandong and Hunan. These regions together represent more than half of China’s thermal power capacity.
Coal generation has also remained broadly flat on a 12-month rolling average since early 2024, indicating that the change is unlikely to be merely a one-year fluctuation.
China previously described its strategy as “building before breaking” — constructing a clean-energy system before reducing dependence on fossil fuels. Ember argues that China is increasingly entering a “building while breaking” phase in which clean-energy expansion and fossil-fuel displacement happen simultaneously.
Battery Storage Capacity Jumps 84 percent
Battery storage is becoming critical to this transition because China needs flexible resources capable of balancing enormous volumes of variable solar and wind generation.
Battery storage overtook pumped hydro in installed capacity at the end of 2024 and expanded another 84 percent during 2025.
Average utilisation of storage approximately doubled between 2022 and 2025, showing that batteries are increasingly being dispatched to support the electricity system rather than simply being installed.
This expansion is also reshaping investment strategies among China’s solar manufacturers.
JinkoSolar, LONGi, JA Solar and Trina Solar have been expanding into energy storage as solar-panel prices remain under pressure and developers increasingly seek integrated solar-plus-storage systems.
China’s energy-storage battery exports are forecast to increase around 30 percent to 150 GWh in 2026, according to Rystad Energy figures reported by Reuters.
JinkoSolar Targets 100 GW Solar Capacity and 13-14 GWh Battery Capacity
JinkoSolar provides one of the clearest examples of how Chinese renewable-energy manufacturers are adjusting their investment strategies.
The company expects annual integrated solar production capacity to reach approximately 100 GW by the end of 2026, including about 14 GW of overseas capacity.
It also expects to have more than 40 GW of TOPCon 3.0 production capacity by year-end.
JinkoSolar shipped 29.6 GW of solar modules during the first half of 2026, with approximately 70 percent exported to overseas markets. Cumulative module shipments have exceeded 420 GW, including more than 250 GW of Tiger Neo modules.
Its next-generation Tiger Neo 5.0 modules offer power output above 700 watts and mass-production efficiency of up to 25.91 percent.
More importantly for China’s changing electricity system, JinkoSolar is aggressively expanding energy storage.
The company plans to increase battery manufacturing capacity from around 5 GWh to 13-14 GWh by the end of 2026, nearly tripling its capacity. It expects full-year ESS shipments to more than double from 2025.
JinkoSolar is also deploying capital into emerging technologies. During Q2 2026, the company and investment funds in which it participates completed strategic investments across 13 projects involving renewable energy, advanced materials, artificial intelligence and other technologies.
LONGi, Trina Solar and JA Solar Move Deeper Into Energy Storage
JinkoSolar is not alone.
LONGi Green Energy, Trina Solar and JA Solar are also increasing their focus on energy storage as the Chinese solar industry shifts from pure module manufacturing toward integrated energy solutions.
LONGi has been promoting solar-plus-storage as a central part of its business strategy, while Trina Solar describes energy storage as a second growth engine after photovoltaics.
Trina’s energy-storage shipments during the March 2026 quarter more than quadrupled year-on-year, with around 90 percent exported, according to Reuters.
This shift has important implications for China’s power transition. Solar manufacturers are no longer competing solely on module production capacity and efficiency. They increasingly want to supply complete systems combining generation, batteries and energy-management technologies.
That combination could make renewable electricity more dispatchable and reduce dependence on coal plants for grid balancing.
Fossil-Fuel Consumption Has Peaked in 8 of 11 Industrial Sectors
The transition is spreading beyond electricity generation.
Fossil-fuel consumption has already passed its peak in eight of the 11 industrial sectors studied by Ember, with most peaks occurring since 2018.
The reductions are substantial in several industries. Fossil-fuel consumption has dropped 26 percent in food and beverages, 52 percent in transport equipment manufacturing and 71 percent in fossil-fuel extraction.
Electrification is a major driver.
Electricity now provides approximately 75 percent of final energy consumption in light-manufacturing sectors such as machinery, electronics and textiles. Electrification is also spreading into more challenging industries including metals smelting and non-metallic minerals.
Importantly, this does not appear to be simply a consequence of deindustrialisation. Industrial value added per person has continued to increase while fossil-fuel consumption per person has declined from its early-2010s peak.
China is therefore changing how its factories consume energy rather than simply producing less.
Electricity Share Rises From 22 percent to 29 percent
Electricity represented 29 percent of China’s final energy consumption in 2024, up sharply from 22 percent in 2015.
That compares with approximately 23 percent in Europe and 21 percent in the United States.
China’s latest Five-Year Energy Plan targets electricity reaching 35 percent of final energy consumption by 2030.
This creates an important feedback loop for renewable investment.
Electrification increases electricity demand, while expansion of solar, wind, storage and grid infrastructure allows an increasing proportion of that demand to be supplied without additional fossil-fuel consumption.
EVs Capture 67 percent of New Passenger-Car Sales
Transport is another area where electrification is starting to have a material impact on fossil-fuel demand.
Electric passenger cars reached 67 percent of new vehicle sales in China in June 2026.
The shift is also spreading quickly into commercial vehicles. Electric truck sales more than doubled in 2024 and again in 2025, reaching 26 percent of new truck sales last year.
Around nine out of every 10 electric trucks sold worldwide in 2025 were sold in China.
The impact on petroleum demand is becoming measurable.
China’s EV fleet displaced an estimated 0.4 million barrels per day of gasoline in 2024, compared with around 0.1 million barrels per day in 2020.
Including other forms of electrification, avoided oil consumption reached at least 1 million barrels per day.
This has strategic significance because China imports more than 70 percent of its oil. Electrification therefore reduces both emissions and exposure to international oil-market disruptions.
China Could Transform Global Coal and Oil Demand
China’s energy transition has consequences far beyond its domestic market because the country has been the primary engine of global fossil-fuel demand growth for more than two decades.
Between 2000 and 2025, China accounted for approximately half of the increase in global oil demand and more than 90 percent of worldwide coal-demand growth.
China’s latest Five-Year Energy Plan expects both oil and coal consumption to peak by 2030.
However, the emerging trends across electricity generation, manufacturing and transportation suggest parts of the economy may already have reached that turning point.
If Chinese oil and coal consumption moves into structural decline, energy exporters whose investment assumptions depend on continued Chinese demand growth could face significant changes in long-term market prospects.
Clean-Tech Exports Exceed $220 Billion
China’s energy transition is simultaneously reshaping its export economy.
Chinese clean-technology exports exceeded $220 billion in 2025 and accounted for 6.6 percent of total exports during the first half of 2026, compared with only 2.7 percent in 2020.
Solar modules, batteries and EVs are increasingly replacing fossil-fuel imports with clean-technology exports in China’s trade relationship with the rest of the world.
Companies such as JinkoSolar, LONGi, Trina Solar and other Chinese manufacturers are consequently becoming important suppliers of the infrastructure that could enable other countries to replicate parts of China’s electrification strategy.
China Starts Addressing Clean-Energy Overcapacity
The next phase will not simply involve constructing more factories.
China temporarily halted approvals for new battery-storage manufacturing projects in September 2026, according to a report by Cailianshe cited by Reuters. The development highlights increasing concern over the enormous scale of manufacturing capacity already created in the country.
The solar industry faces similar pressure from excess manufacturing capacity and low module prices.
As a result, Chinese manufacturers are increasingly shifting their focus toward higher-efficiency solar technology, energy storage, integrated solar-plus-storage systems and better utilisation of existing capacity rather than unrestricted factory expansion.
China’s Energy Transition Enters a New Phase
China remains heavily dependent on coal, and fossil fuels will continue playing a major role in its energy system for years. But the latest indicators suggest a structural change is under way.
Thermal generation declined 0.7 percent despite 5 percent electricity-demand growth. Coal generation has stopped expanding across 17 regions. Battery storage capacity surged 84 percent in 2025. Fossil-fuel use has peaked across eight industrial sectors. EVs captured 67 percent of new passenger-car sales, while clean-technology exports exceeded $220 billion.
Meanwhile, manufacturers are providing the industrial capacity behind the transition: JinkoSolar is targeting 100 GW of integrated solar capacity and 13-14 GWh of battery manufacturing capacity, while LONGi, Trina Solar and JA Solar are accelerating their push into energy storage.
The significance for global energy markets is substantial. China spent the previous decade building the world’s largest renewable-energy, battery and EV manufacturing ecosystem while its fossil-fuel system continued expanding.
The emerging phase is different: clean electricity is beginning to replace coal, electrification is starting to displace oil, and China’s manufacturers are increasingly investing in the storage technologies needed to make that transition sustainable.
Given that China generated more than 90 percent of global coal-demand growth between 2000 and 2025, the success of this transition could reshape the outlook not only for China’s energy market, but for global coal, oil, solar, battery and electricity industries through 2030.
BABURAJAN KIZHAKEDATH
