Analysis: China’s clean energy pushes coal to record low of 53% share of energy in May 2024

In May 2024, renewable energy accounted for a record 44% of China’s electricity generation, driving coal’s share down to a record low of 53%, despite continued growth in demand.

A new Carbon Brief analysis, based on official figures and other data that only became available last week, reveals the true scale of coal’s decline in the energy mix.

Coal is down seven percentage points from May 2023, when it accounted for 60% of China’s energy production.

Other key findings revealed by the analysis include:

• The National Bureau of Statistics (NBS) monthly generation data by technology is currently severely limited for wind and solar. For example, it excludes “distributed” rooftop solar installations and smaller centralized solar plants, which account for only about half of solar generation.
• This discrepancy becomes obvious when comparing the NBS total monthly electricity production figure of 718 terawatt-hours (TWh) with the reported monthly electricity demand of 775 TWh, according to the National Energy Administration (NEA). In reality, electricity production must be higher than demand due to losses in power plants and the grid.
• Media reports had speculated that a record increase in renewable energy generation capacity in May would encounter grid constraints, but new data shows this is not the case.
• China’s electricity demand in May 2024 increased by 49 TWh (7.2%) compared to the previous year.
• During the same period, renewable energy generation increased by a record 78 TWh, including a record increase from solar of 41 TWh (78%), a recovery from earlier drought-related declines in hydropower of 34 TWh (39%) and a moderate increase from wind of 4 TWh (5%).
• With clean energy growing at a faster pace than electricity demand, fossil fuel production was forced to retreat, recording its biggest monthly decline since the Covid 19 pandemic. Gas production fell by 4 TWh (16%) and coal by 16 TWh (4%).
• Falling fossil fuel production points to a 3.6% drop in CO2 emissions from the power sector, which accounts for about two-fifths of China’s total greenhouse gas emissions and has been the main source of emissions growth in recent years.

The new findings indicate a continuation of recent trends that contributed to a reversal in carbon dioxide (CO2) emissions from fossil fuels and cement in China in March 2024.

If the current rapid expansion of wind and solar power continues, China’s CO2 emissions will likely decline further, making 2023 the country’s peak emissions year.

Monthly mismatch

Each month, the NBS releases China’s electricity generation data by technology. The May 2024 data was released almost a month ago, in mid-June, and has been widely commented on.

But these figures are increasingly limited because they exclude, among other things, “dispersed” solar installations, such as those on the roofs of homes and businesses. Analysis for this article shows that this leaves out about half of all solar-generated electricity.

The fact that the NBS data on power generation is incomplete is obvious when you look at the consumption figures: the NEA reported electricity consumption in May at 775 TWh, while the NBS reported generation at just 718 TWh. In reality, generation must be much greater than consumption due to losses in power plants and in transmission.

The seemingly small amount of energy generated from solar and wind reported by the NBS has caused confusion and led to claims that the efficiency of wind and solar power in China is poor.

Wind and solar generation performance is tracked using “utilization” data collected by the China Electricity Council (CEC), showing actual production relative to maximum potential. These figures are typically included in monthly statistics released by the NEA.

The NEA omitted this data from its May release, leading to speculation from Bloomberg and Reuters that it was due to weak wind and solar results. This turned out to be largely untrue when data became available directly from the CEC, with solar upswinging significantly and wind downswing, but within normal year-over-year fluctuations.

Another data set, tracking the fraction of solar and wind power wasted due to grid inflexibility, showed modest increases of 0.8 percentage points for solar and 1.7 points for wind. That’s problematic for plant operators, but well below the jump that would have a significant impact on utilization rates—they typically vary by more than 5% from year to year.

Enough data has now been collected to bypass limitations in the NBS power generation data and provide a full picture of China’s energy mix in May.

The first thing to note is that the NBS numbers are normalized to a 30-day month, which is a fraction of the difference. The rest of this article uses the normalized 30-day numbers.

Instead of using NBS numbers, it is possible to estimate solar and wind generation based on reported capacity and usage. Combining these estimates with reported generation for other technologies gives a total generation of 783 TWh and a year-on-year increase of 8%.

The declared electricity consumption of 750 TWh – when normalised to a 30-day month – is consistent with the estimated production of 783 TWh, with the difference of 4.2% being due to transmission losses.

Monthly data for transmission losses are not available, but the average for 2023 was 4.5%, which is close to the difference between reported consumption and estimated generation.

Record results

A breakdown of the numbers shows a record 78% increase in solar power generation in May 2024, not the modest 29% year-on-year increase seen in incomplete NBS data.

Installed solar capacity increased by 52% to 691 gigawatts (GW), and capacity utilization improved from 16% to 19%. This resulted in the largest increase in electricity generation in China among all technologies, with solar generation increasing by 41 TWh, from 53 TWh in May 2023 to 94 TWh in May 2024.

The second-biggest increase was hydropower, where capacity increased by just 1% but utilisation jumped from 31% to 41% as the sector recovers from a record drought in 2022-2023. This led to a 39% or 34 TWh increase in power generation, which reached 115 TWh.

Wind power saw a significant increase of 21%. However, utilisation fell, probably due to monthly fluctuations in wind conditions. As a result, power generation increased by a relatively modest 5%, or 4 TWh, to 83 TWh. Nuclear and biomass power generation also saw a small increase in capacity, but nuclear utilisation fell from 87% to 85%.

In total, clean energy production increased by 78 TWh, as shown in the figure below. This was more than enough to exceed the increase in demand of 49 TWh.

As a result, gas generation fell 16%, despite a 9% increase in capacity, which caused a sharp 24% drop in utilization. Coal generation capacity rose 3%, while coal-fired power generation fell 3.7%, causing average plant utilization to fall 7%. Falling demand could dampen investment in new coal capacity, which has been hot in the past two years.

Changes in power generation from coal and gas, combined with a slight decline in the thermal efficiency of coal-fired power plants, mean a 3.6% drop in CO2 emissions from the power sector.

Following these production changes, China’s energy mix shifted significantly away from fossil fuels in May 2024. Coal’s share of energy fell to 53%, down from 60% in the same period last year. This was the lowest share on record, as shown in the chart below.

Meanwhile, solar rose to 12%, up from 7% a year earlier, the highest share on record. The rest were wind (11%), hydro (15%), nuclear (5%), gas (3%) and biomass (2%).

The total share of non-fossil energy was a record 44%, while the share of variable renewable energy sources – solar and wind – reached a new record of 23%.

Solar and wind are rapidly gaining share in China’s energy mix, despite growing demand, as shown in the figure above. In May 2016, they accounted for just 7% of the total.

Meanwhile, clean energy capacity growth continued to be robust in May 2024, with 19 GW of solar, 3 GW of wind and 1.2 GW of nuclear added.

In the first five months of 2024, China added about 79 GW of solar power and 20 GW of wind power. These additions are 29% and 21% higher, respectively, than last year’s numbers, which were already record-breaking, as shown in the figure below.

Specifically for solar, monthly gains in May 2024 were higher than in the previous month, April, and also increased year-over-year compared to May 2023.

The rapid growth in solar power generation shows that the solar power boom is providing new electricity supplies on a scale sufficient to meet most of the growth in demand in China.

This reinforces the view that China’s CO2 emissions are in structural decline.

If clean energy production maintains the levels achieved in 2023 and early 2024, CO2 emissions will likely continue to decline, confirming 2023 as the country’s peak emissions year.

With China set to announce new climate targets early next year, the government’s level of ambition for clean energy development remains an open question.

About data

Wind and solar capacity and thermal capacity breakdown by fuel were calculated by multiplying generating capacity at the end of each month by monthly utilization – a percentage of maximum possible capacity – using data provided by the China Electric Power Council via the Wind Financial Terminal.

Total generation from thermal, hydro, and nuclear was taken from the National Bureau of Statistics monthly publications. Monthly utilization data was not available for biomass, so an annual average of 52% for 2023 was used.

CO2 emissions from electricity generation were calculated using emission factors from the latest China National Greenhouse Gas Emissions Inventory for 2018, as well as the average monthly thermal capacity of coal-fired power plants provided by the National Energy Administration. The average thermal efficiency of gas-fired power plants was also assumed to be 50%.