Global Coal Capacity Reaches Decade-High in 2025 But Electricity Generation Falls

In 2025, the world witnessed an unexpected dichotomy in coal power: the number of new coal plants hit a 10-year peak while the actual electricity produced from coal declined. According to Global Energy Monitor's latest report, nearly 100 gigawatts (GW) of new coal capacity came online—roughly equivalent to 100 large plants—yet global coal-fired generation fell by 0.6%. This widening disconnect highlights the accelerating shift toward renewables and the concentration of coal expansion in just two countries. Below, we explore the key questions raised by these contrasting trends.

How many new coal plants were built in 2025 and how does it compare historically?

In 2025, the world added 97 gigawatts (GW) of new coal-fired power capacity, the second-highest annual addition on record. The peak was in 2015 when 107 GW began operating. This means 2025 saw the highest level of coal capacity additions in a decade. To put it in perspective, 97 GW is roughly equivalent to building 100 large coal plants in a single year. However, capacity only measures potential maximum output; actual generation tells a different story.

Global Coal Capacity Reaches Decade-High in 2025 But Electricity Generation Falls — Source: www.carbonbrief.org

Which countries are driving this new coal plant construction?

The dominance of China and India is overwhelming. Together, they accounted for 95% of all new coal capacity in 2025. China alone added 78 GW (a 6% increase in its total coal fleet), while India added 10 GW (a 3.8% rise). The remaining 9 GW came from all other countries combined. This concentration is even more pronounced than in the first half of 2025, when China and India accounted for 87%—showing how the rest of the world is largely exiting new coal construction.

Why did global coal electricity output fall despite more plants?

Even as coal capacity surged, the amount of electricity actually generated from coal dropped by 0.6% globally. In China, output fell 1.2% despite a 6% capacity increase; in India, generation fell 2.9% despite 3.8% more capacity. The reason: solar and wind power are displacing coal on the grid. Record additions of renewable energy, along with lower running hours per coal plant, meant each plant operated less frequently. This declining utilization is a critical factor eroding coal's profitability.

What happened to planned coal plant retirements in 2025?

Nearly 70% of the coal-fired units scheduled for retirement globally in 2025 did not shut down. These postponements were triggered by the 2022 energy crisis, which drove up gas prices and raised security-of-supply concerns, as well as policy shifts in the United States. Such delays complicate the global transition away from coal, even as new renewable capacity grows. However, the report notes that the underlying dynamics have shifted: falling renewable costs and lower coal usage are making old plants increasingly uneconomical to run.

What is the 'widening disconnect' in the coal sector?

The report describes a widening disconnect between coal capacity additions and actual coal power generation. On one hand, countries—especially China and India—continue to build new coal plants, leading to a 10-year high in capacity. On the other hand, the amount of electricity these plants produce is falling because cheap renewables are taking over. This means that coal plants are being used less and less, which undermines their financial viability. The trend is becoming self-reinforcing: as solar and wind get cheaper, coal runs less, making further coal investment riskier.

How does solar and wind growth affect coal plants in China and India?

Both China and India are building solar and wind capacity so fast that it is directly displacing coal generation. In China, renewable additions in 2025 were record-breaking, pushing coal's share of the electricity mix down. In India, similar dynamics occurred. As Christine Shearer, project manager at Global Energy Monitor, stated: 'They are building solar and wind fast enough to displace [coal].' This displacement not only reduces coal generation but also lowers the capacity factor of existing coal plants, making them run for fewer hours and cutting into profits.

What are the long-term implications for coal power profitability?

The combination of falling renewable costs and declining utilization rates has fundamentally shifted coal power's economics. Even in China and India, where coal is still subsidized and prioritized for energy security, the profitability of new coal plants is questionable. If coal plants run less often, their fixed costs are spread over fewer kilowatt-hours, raising the cost per unit. This creates a cycle: as renewables expand further, coal becomes less competitive, prompting more plant idling or early retirement. The GEM report suggests that while short-term fluctuations may still occur due to energy crises, the long-term trend points to a steady decline in coal's role in global electricity generation.

Tags: