China continues to chart its own energy path, positioning the industrial giant remarkably well for the age of electrification and the voracious energy appetite of AI.

While the West was tearing down baseload generation in favor of the promise of renewable energy – leading to mounting reliability concerns and a European energy crisis following Russia’s invasion of Ukraine – China has pursued a policy of energy addition.

President Xi Jinping, hedging his bets against the challenges of integrating renewable energy, in 2022 laid out how China’s energy strategy would differ from the West. China, he said, would follow “the principle of building the new before discarding the old.” And build – both renewable power and coal generation – China has.

China’s abundance agenda has it both lapping the world in the deployment of renewable energy and rapidly expanding – not just maintaining – the world’s largest coal fleet.

In just the first half of this year, China added 268 gigawatts (GW) of new solar and wind power, an extraordinary amount nearly equal to all of the wind and solar the United States has ever built. By one calculation, China is installing solar at such a pace it’s equivalent to adding 100 solar panels every second.

This renewable surge is coming on the shoulders of the rapid expansion of the world’s largest coal fleet.
China commissioned 21 GW of coal power in the first half of the year with projections for the full year exceeding 80 GW.

This year’s expansion of the coal fleet comes on top of a surge in coal permitting during 2022-2023 when China was permitting more than two new coal plants per week. Notably, these coal additions are not replacing existing coal plants. Just 1 GW of coal capacity has been retired this year. Coal is the foundation of China’s industrial and economic might and that shows no signs of changing. China now uses nearly 40% more coal than the rest of the world combined.

China’s remarkable growth strategy has turned it into an electricity behemoth. As recently as 2010, China and the U.S. generated the same amount of electricity. No longer. Last year, China generated more electricity than the combined output of the U.S., E.U. and India—the world’s next three largest producers.

Coal as Bridge Fuel Away from Oil

If there is any energy transition to be found in China, it’s not away from coal, it’s away from oil.

As Clyde Russell, the Asia commodities editor for Reuters, observed, the rapid electrification of the Chinese economy appears to be a strategy to break Beijing’s reliance on oil imports. “Instead of pushing out coal, it appears that the fuel being most targeted by renewables in China is crude oil,” says Russell.

Despite auto sales in China jumping 11.4% in the first half of 2025 to 15.65 million vehicles, Chinese oil demand is barely budging. Sales of battery electric and plug-in hybrid vehicles has surged 43% in the same period to 6.94 million vehicles. EVs are beginning to significantly impact Chinese oil demand. In fact, last year China’s crude oil imports fell 1.9%.

China – now the world’s first electro-power – is at, or very near, peak oil demand. As Russell concluded, “in some weird way, coal is turning out to be China’s transition fuel from crude oil to renewables.”

In the coal and renewables combination, China has found a pathway to energy security and the vehicle on which to drive its economy. For China, energy security propelled by energy abundance has always come first. As we try to catch up in the new industrial arms races of the 21^st century, that’s a lesson we would be wise to learn.