China's thermal power generation saw a narrower year-on-year (YoY) decline in December 2025, as the growth of clean energy output slowed and winter demand surged, reinforcing coal's role as the backbone of the national power system.

Output of thermal electricity, mainly coal-fired, stood at 581.17 TWh in December, down 3.2% YoY, shrinking by 1 percentage point month on month (MoM), according to data released by the National Bureau of Statistics. The output figure was up 16.9% MoM.

Electricity production from all sources remained broadly stable during the month. The seasonal winter spike in electricity demand, driven by heating needs and active economic sectors, shored up overall power consumption.

Hydropower production dipped as major river basins saw dwindling inflows, a common pattern during the dry season. Simultaneously, lower wind speeds and a slowdown in solar power generation growth magnified thermal power's stabilizing role in the energy mix, underpinning the narrowing YoY decline in output.

Falling market coal prices throughout December reduced the cost of thermal generation, incentivizing utilities to ramp up production.

Nevertheless, the sustained YoY dip in thermal coal was largely due to the warmer-than-usual winter and a reduced share of thermal capacity installations in the total energy mix. This broader trend will persist in the long term, given the ongoing transition in China's energy and economic structures.

From December 1 to 25, the national average temperature stood at -0.90 degrees Celsius, 1.71 degrees Celsius above the historical average, making it the second warmest December since 1961, trailing only 2016, showed data from the National Climate Center.

Despite the overall warmth, more frequent cold spells drove up electricity demand, fueling coal consumption at power plants.

By the end of December, daily coal consumption at six major coastal power groups rose 7.3% MoM. Their coal inventories could cover 16 days of usage, down from 19 days at November's end.

In 2025, China's thermal power generation amounted to 6,294.55 TWh, falling 1.0% YoY, expanding by 0.3 pp from the January-November period, as per NBS data.

In December, Inner Mongolia, Guangdong, Xinjiang, Jiangsu, and Shandong were the top five thermal power producers, reaching 54.32 TWh (-0.4% YoY), 44.72 TWh (9.2% YoY), 44.36 TWh (9.9% YoY), 44.28 TWh (-6.0% YoY), and 41.38 TWh (-7.5% YoY), respectively.

Top provinces in cumulative electricity generation were Inner Mongolia, Jiangsu, Guangdong, Shandong, Xinjiang, and Zhejiang over January-December, with output of 592.04 TWh (-4.2% YoY), 510.22 TWh (-0.1% YoY), 504.18 TWh (2.3%YoY), 487.33 TWh (-3.8% YoY), 394.49 TWh (1.6% YoY), and 363.55 TWh (6.8% YoY), respectively.

December saw 11 or 35.5% of the provinces or regions register YoY increases in thermal power generation, flat from the month-ago level. Notable growth rates were observed in Gansu (23.6%), Qinghai (18.4%), Sichuan (10.4%), Xinjiang (9.9%), Guangdong (9.2%), and Beijing (5.1%).

During the past year, 13 provinces or regions recorded YoY growth in thermal power generation, constituting 42% of the nation's total. Xizang (39.5%), Gansu (15.7%), Qinghai (6.8%), Zhejiang (6.8%), Jiangxi (4.9%), and Liaoning (4.5%) reported the largest growth rates.

Looking ahead, meteorological forecasts for January 2026 indicate varied regional patterns of precipitation. Precipitation in Inner Mongolia, the northeast, and parts of the southwest is expected to exceed historical averages by 20-50% throughout this month, whereas much of central and southern China is likely to see less precipitation than usual.

Entering January, China's power loads refreshed new records due to cold snaps. According to the National Energy Administration, the power load in January has set three new winter records, with peak load, for the first time, surpassing 1.4 TW, reaching as high as 1.42 TW. Daily electricity consumption crossed the 300 TWh mark, the first time for winter.

The National Development and Reform Commission announced on January 20 that in 2026, China will accelerate the shift of coal power from a basic supply role to a flexible, regulatory one. Though renewable capacity has now overtaken coal in total installations, coal-fired power remains the backbone of China's electricity system to ensure grid stability and compensate for the intermittency of renewables.

As January's cold grip continues and output from wind and solar remains subject to volatility, thermal power generation may remain active.