CEF CHINA: ELECTRICITY SECTOR 9MCY2026 UPDATE

CHINA’S ELECTRICITY DEMAND GROWTH CONTINUES TO SLOW IN SEPTEMBER 2026, WHILE COAL POWER GENERATION FELL FOR A THIRD CONSECUTIVE MONTH. ZERO-EMISSIONS GENERATION IS UP +7.4% YOY IN 9MCY2026 YEAR-TO-DATE. SOLAR REMAINED THE TOP SOURCE OF NEW CAPACITY, BUT NEW FOSSIL ADDITIONS ARE CONCERNING 

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CEF CHINA MONTHLY: COAL POWER GENERATION FALLS FOR A THIRD CONSECUTIVE MONTH BUT NEW FOSSIL ADDITIONS ARE CONCERNING

Tim Buckley & Li Ang, Climate Energy Finance
28 October 2026

Solar and wind advance as coal declines

In September 2026, China’s total power generation grew modestly by 0.9% year-on-year. This slight demand growth was consistently outpaced by zero-emissions energy generation, leading to a third consecutive monthly decline in fossil fuel generation. September data highlights the importance of a diversified clean energy mix: growing solar, wind, and nuclear power offset weaker hydropower output, while coal generation continues to decline. Accelerating renewable deployment, along with investment in grid and storage solutions, should remain a priority to turn these monthly coal declines into a lasting structural trend .

⚡ Total generation. China’s total power generation reached 900 TWh in September 2026, up 0.9% year on year. In the first nine months of the year, total generation rose to 8,052 TWh, up 3.5% year-on-year  — Figure 1.

☀️ Solar and wind continued to outperform overall generation growth. Year-to-date, solar output surged 16.1%, accounting for 13.2% of total generation, while wind grew 4.9%, contributing 10.6%. In September alone, growth was even more pronounced, with solar energy increasing by 22.2% and wind by 16.1% .

🪨 Coal generation fell 1.5% yoy to 465 TWh in September, marking its third consecutive monthly decline. Despite this, coal still accounted for 53.4% of total generation year-to-date, up 0.7% year-on-year. The objective remains to turn these monthly coal declines into a sustained structural trend and accelerate the process.

💧Hydropower and nuclear. Hydropower output fell significantly, down 18.1% year-on-year in September, while nuclear generation rose 21.5%, helping offset the shortfall.

🔋 Zero-emissions generation. Zero-emissions sources supplied 3,423 TWh in 9MCY2026, up 7.4% yoy, and accounted for 42.5% of total generation. Within this total, variable renewable energy — solar and wind — contributed 1,917 TWh, up 10.8% yoy, representing a 23.8% share. In September, combined solar and wind generation rose 19.6% yoy, while total zero-emissions generation increased 3.6% yoy despite the decline in hydropower.

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CAPACITY: SOLAR REBOUNDS, BUT FOSSIL ADDITIONS REMAIN A CONCERN

In September, solar remained China’s leading source of new power capacity, while wind and hydropower also recorded strong growth. Nevertheless, continued fossil capacity additions remain difficult to reconcile with China’s long-term decarbonisation ambitions.

By September 2026, China’s total installed power capacity had reached 4,132 GW. Renewable capacity stood at 2,470 GW, representing 60% of the total, while zero-emissions capacity—including nuclear power—reached 2,539 GW, or 61% – Figure 2.

⚡️China added 252.9 GW of new capacity during the first nine months of 2026, down 31% year on year, primarily because of the sharp contraction in solar installations. September additions nevertheless increased 52% year on year to 31.4 GW, led by solar (13.6 GW, +47%), fossil power (7.5 GW, +13%) and wind (7.4 GW, +139%).

☀️ Solar remained the largest source of new capacity in 9MCY2026, contributing 110.8 GW, equivalent to 44% of all additions. However, solar installations were still 54% lower year on year, reflecting the substantial slowdown from 2025’s policy-driven deployment peak. Wind contributed another 60.7 GW, or 24% of new capacity.

💧 Including 9.2 GW of hydropower, renewable-energy additions totalled 180.7 GW, accounting for 71% of all new capacity. With a further 6.0 GW of nuclear power, zero-emissions additions reached 186.7 GW, representing 74% of the nine-month total. September was particularly strong: renewable additions rose 81% year on year to 22.7 GW, while zero-emissions additions increased 70% to 23.9 GW.

🪨 Fossil power additions reached 66.3 GW in 9MCY2026, up 17% year on year and accounting for 26% of all new capacity. Although zero-emissions deployment remained nearly three times higher, adding another 7.5 GW of fossil capacity in September is concerning.

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CLEAN-TECH PRODUCTIONS

Battery production reached 237.8 GWh in September, up 57.3% from a year earlier, driven by strong demand from energy storage and export markets.

NEVs production continued to expand in September, rising 16.9% year-on-year. Production in the first nine months of 2026 was up 12%.  Production of fuel-burning vehicles fell sharply by 28%. EVs made up 61% of all vehicles produced.

Solar cell production fell 5% in September, moderating from the year-to-date drop of 14% and coming in at a respectable 74GW in one month. Especially combined with booming wafer exports, this signals robust demand for solar panels from overseas and domestic markets. 

Carbon-intensive industries like steel, cement, and chemicals continued to stagnate. Average daily crude steel output hit a multi-year low in early October (CREA).

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ICE VEHICLES TO DECLINE FROM OVER 90% TO 33%

In September, sales of internal combustion engine (ICE) vehicles in China fell to just one-third (33%) of the market for the first time. Meanwhile, battery EVs made up nearly half the market at 47.3%, and plug-in hybrids contributed an additional 19.7%, which includes range-extended electric vehicles primarily powered by electricity. It took only five years for ICE vehicles to decline from over 90% to 33% (Ember EV Sales Data Tracker) – Figure 3.

China’s trade surplus is already near US$1 trillion. It shows how ineffective Trump's trade war on China has been! China's total import and export value of goods reached US$ 5.97 trillion Q1-Q3 2026, a yoy increase of 18.8%. Of this total, exports rose by 16.4% to US$ 3.47 trillion (China Customs). The fourth quarter is normally the strongest export season of the year, so the surplus is likely to widen and intensify trade tensions with major partners (Bloomberg) - Figure 4.

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CLEANTECH EXPORTS REACHED ANOTHER RECORD HIGH

China’s cleantech exports reached $31,843m in September, another record high (Ember China cleantech exports track – Figure 5). Q1-Q3 2026, exports of electric vehicles grew 72.3%, lithium batteries 36.4% (various types of storage batteries 34.8%), photovoltaic products 10.3%, and wind turbine generator sets and their components 22.4%. Private enterprises recorded import and export values of US$3.4 trillion, up 19.1% and accounting for 56.9% of total foreign trade value (China Customs).  China’s new energy vehicle (NEV) exports reached 4 million units in the first nine months of 2026, up 130% year-on-year. Surging exports supported continued NEV production growth despite declining domestic vehicle sales.

China’s latest annual climate policies and actions report, released in October ahead of COP31, highlights a major shift: for the first time in nearly a decade, thermal power generation declined in 2025, with renewables meeting all additional electricity demand and coal’s share falling below 50% in H1 2026. The report emphasises China’s growing role in international climate governance, but notes climate and trade tensions persist. At the accompanying press conference, the Vice Minister cited unilateralism and protectionism as threats to global climate progress and urged action at COP31. Ongoing clean-tech trade disputes underscore how intertwined climate cooperation and trade remain. Stronger domestic deployment targets could help absorb rising production and ease partners’ concerns.

China's first regional electricity market goes live on October 24, marking a major step toward a unified national power system. The Southern China Regional Electricity Market—covering Guangdong, Guangxi, Yunnan, Guizhou, and Hainan—now operates formally after a successful trial that began in June 2025. All market participants, from coal to wind and solar, compete under a single set of rules, driving efficiency and boosting renewable integration. From January to September, nearly 900 billion kWh were traded—over 70% of grid sales—with renewables making up 40% of new electricity sold. This market sets a benchmark for other regions.

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