A new report from energy think tank Ember reveals that China's rapid clean energy expansion is now meeting soaring electricity demand while simultaneously pushing coal power into decline. In 2025, thermal generation—predominantly coal-fired—fell by 0.7% even as the country's electricity demand jumped by 5%. This marks a significant shift from 2015, the last time thermal generation fell, when electricity demand barely rose by 0.5%.
The report indicates that coal generation has plateaued in 17 of the 26 Chinese provinces analyzed, including industrial powerhouses like Shandong and Hunan. These regions collectively account for more than half of China's thermal power capacity. Furthermore, coal generation has been flat on a 12-month rolling average since early 2024, suggesting this decline is not an isolated event.
Battery storage has become critical in balancing the grid. It overtook pumped hydro as China's largest source of installed energy storage capacity by the end of 2024 and grew an additional 84% in 2025. Average battery utilization has roughly doubled since 2022, indicating they are increasingly used for grid management.
Electrification is advancing rapidly across industry and transport. In light manufacturing sectors like machinery and electronics, electricity now supplies around 75% of final energy demand. The electric vehicle (EV) market is booming, with electric passenger cars reaching 67% of new car sales in June 2026, and electric truck sales hitting 26% of new truck sales in 2025. This EV fleet displaced an estimated 400,000 barrels per day of gasoline demand in 2024, and total electrification avoided at least 1 million barrels per day of oil demand overall.
This transition has profound implications for global energy markets. As China has been the engine of global fossil fuel demand growth for a quarter-century, its declining coal and oil consumption signals a major shift. This trend presents both challenges and opportunities for B2B buyers and suppliers worldwide. Companies should anticipate increasing demand for clean energy technologies, battery storage solutions, and electric vehicles, as well as a potential oversupply in fossil fuel markets.
This coal-to-clean transition underscores the critical role of battery storage and EV adoption. For businesses in the drone and battery sector, this signals robust demand for advanced battery technologies, where our customizable solutions can support rapid market adaptation.
