From baseload to flexibility: How is coal’s role in China changing

China is repositioning its coal fleet to provide system flexibility, with the entire existing fleet on track to be retrofitted by 2027. While technical capacity is increasing, the report argues that full flexibility is constrained by power market design and dispatch practices. It emphasizes that as coal retrofit potential plateaus, the rapid scale-up of clean flexibility, particularly battery energy storage, is essential to avoid locking in emissions beyond 2030 and to maintain grid stability as renewables become dominant.

• China is on track to complete flexibility retrofits for its entire existing coal fleet by 2027. As of the third quarter of 2024, 360 GW of coal power had been retrofitted, contributing to a total flexible coal power capacity exceeding 600 GW by the end of 2024.
• The utilization of coal power is shifting from consistent baseload generation to a more seasonal and variable pattern. The monthly variance in current coal capacity utilization is twice what it was during the historical low point of 2016.
• Flexible operation of coal plants introduces significant economic and technical burdens, including higher operation and maintenance costs, accelerated depreciation, and reduced fuel efficiency. Coal consumption per unit of electricity increases by approximately 10% at 40% load, 20% at 30% load, and nearly 60% at 20% load.
• To support the transition, China introduced a coal capacity pricing mechanism in early 2024 to remunerate plants for available capacity rather than just energy generation. This was upgraded in January 2026 to include other resources like battery energy storage and promote market-based price formation.
• Battery energy storage is critical to replacing coal's flexibility role as retrofits peak. China has installed nearly half of the world's battery energy storage and had 144.7 GW of new energy storage capacity by the end of 2025, putting it on track to exceed its 2027 target of 180 GW.
• Systemic constraints, rather than physical capacity, currently limit the activation of coal flexibility. These include administrative dispatch decisions, a lack of economic dispatch based on marginal cost, and inflexible inter-provincial contracts.

APA

Yang, B. (2026). From baseload to flexibility: How is coal’s role in China changing. Ember. https://ember-energy.org/app/uploads/2026/02/From-baseload-to-flexibility-How-is-coals-role-in-China-changing-PDF.pdf

Chicago

Yang, Biqing. From baseload to flexibility: How is coal’s role in China changing. Ember, 2026. https://ember-energy.org/app/uploads/2026/02/From-baseload-to-flexibility-How-is-coals-role-in-China-changing-PDF.pdf.

Wikipedia

{{cite report |last1=Yang |first1=Biqing |title=From baseload to flexibility: How is coal’s role in China changing |publisher=Ember |date=10 February 2026 |url=https://ember-energy.org/app/uploads/2026/02/From-baseload-to-flexibility-How-is-coals-role-in-China-changing-PDF.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yang2026from, author = {Yang, Biqing}, title = {{From baseload to flexibility: How is coal’s role in China changing}}, institution = {Ember}, year = {2026}, month = feb, url = {https://ember-energy.org/app/uploads/2026/02/From-baseload-to-flexibility-How-is-coals-role-in-China-changing-PDF.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }