China’s state-owned enterprises (SOEs) are investing in low-carbon sources and helping push the country’s energy transition towards a “critical turning point” where coal power starts to decline, a new report finds.
The report, by thinktank Ember, finds that, in the decade to 2020, central government-controlled power companies (central SOEs) had increased their wind and solar capacity nearly five-fold, surpassing 200 gigawatts (GW).
By 2022 – the most recent data available in the report – central SOEs accounted for about 40% of China’s installed solar capacity and 70% of its wind capacity.
Together with local government-controlled energy firms (local SOEs), these companies have made a “significant contribution” to shrinking coal’s share of China’s electricity mix, which has dropped from more than 70% in 2000 to less than 60% in 2023.
Moreover, coal is contributing less to meeting China’s rising electricity demand, the report says. From 1991-2000, 85% of the incremental electricity demand was met by coal, while in 2011-2020 this figure dropped to only 47%.
The report adds that, if current trends continue, coal power in China “will being to decline in absolute terms”, a turning point that could trigger a reduction in carbon dioxide (CO2) emissions from the country’s electricity sector – and its emissions overall.
While SOEs’ diversification strategies have reduced their reliance on coal, however, the report says that these entities remain closely bound up in the “coal-electricity ecosystem”.
As such, the turning point away from coal power could trigger “potential tensions and conflicts” – particularly in coal-reliant regions of the country – that will need to be addressed in order for China’s energy transition to continue.
The transition journey of SOEs
SOEs are organisations set up to carry out commercial activities on behalf of the government.
They play a “crucial role” in China’s economy, particularly in key sectors, such as energy. According to the World Bank, SOEs accounted for 23-28% of China’s GDP in 2017.The leading nine power-sector SOEs are dubbed as “five bigs and four smalls” (五大四小). Collectively, these firms control more than half of China’s electricity generation capacity, as shown in the figure below.
Power-sector SOEs are particularly dominant in terms of the “coal power market (煤电市场)”, Ember notes, with private capital only accounting for a 5% share.
This gives power-sector SOEs a key role in China’s energy transition.
In addition, as a hybrid of corporate organisation and government ministry, SOEs’ development plans closely follow the central government’s overall blueprint.
Their governing body, the state-owned assets supervision and administration commission (SASAC), issued a “guiding opinion” mandate for SOE’s energy transition in 2021, after president Xi Jinping declared the “dual carbon” goal in 2020.
(The “dual carbon” goal is to peak emissions before 2030 and become “carbon neutral” before 2060. Read Carbon Brief’s China country profile for more detail.)
The mandate says that in order to “lay a solid foundation for achieving carbon peak” by 2030, SOEs should “incorporate over 50% of renewable energy in their generation capacity mix by 2025”.
Another recent report, by thinktank Climate Energy Finance (CEF), finds that the “five big” SOEs have poured tens of billions of yuan (billions of dollars) into the buildout of renewable energy, since this document was issued.
With capital expenditure being aligned with energy diversification goals, CEF says all “five bigs” already met the SASAC target in 2023.
Ember’s study on central SOEs finds their wind and solar capacity increased nearly five-folds since 2011, surpassing 200GW in 2020, roughly equivalent to the total installed capacity of Germany.
In 2022, central SOEs accounted for about 40% of China’s solar capacity and 70% of the wind capacity, adds Ember, leading China to approach “a critical turning point in its transition towards a clean electricity future”.
The Ember report says if current trends in energy transition continue, coal power will “begin to decline in absolute terms” – a similar conclusion to recent Carbon Brief analysis.
Pushing down coal’s share
Coal’s share of China’s electricity generation is declining. As shown in the figure below, coal’s share (black) dropped from nearly 80% in 2000 to about 60% in 2023.
(It fell further still, to a record-low 53% in May 2024, according to Carbon Brief analysis.)
Meanwhile, the combined share of wind (dark green) and solar (light green) grew from about 4% in 2015 to almost 16% in 2023, says Ember.
In addition, the role of coal in meeting the growing electricity demand is diminishing, as shown in the figure below.
Ember finds about 85% of the incremental electricity demand from 1991-2000 was met by coal (black), falling to 76% in the decade to 2010 and only 47% in the decade to 2020.
The contribution of renewable energy (green), including wind, solar, hydro, bioenergy and other sources, steadily increased over the same time period.
In 2023, China’s demand for electricity grew 6.7% compared to the previous year – higher than the average annual demand growth of about 6% between 2013 and 2022.
Ember says that, although hydropower decreased by about 59 terawatt hours (TWh) in 2023, wind and solar met 46% of the increased demand, followed by bioenergy and nuclear.
“If hydro had remained at 2022 levels, non-fossil fuel generation would have met more than half of the demand increase in 2023, further pushing coal power out of the generation mix,” adds the report.
(Carbon Brief’s previous analysis shows the decline of hydropower was due to a series of droughts in 2022/23.)
Muyi Yang, author of the Ember report, tells Carbon Brief that the surge in low-carbon energy means an “absolute decline” in coal power is “very likely to soon begin”.
Yang also thinks “the recent announcement of the ‘coal power low-carbon retrofitting action plan’ signifies that China has started to prepare for the new era of coal generation”.
The action plan, released by China’s top planner National Development and Reform Commission (NDRC), is allocated to a number of SOEs, including the “five bigs”.
However, the Shuang Tan newsletter says the action plan is designed “to test the selected technologies at a few carefully chosen [SOE] coal power units”. Moreover, since the action plan did not set a “performance target”, it is “unlikely to drive industry-wide transformation”, adds the newsletter.
‘Crossing the river by touching the stones’
Despite the progress to date in diversifying China’s electricity supply – and the business models of the country’s power sector SOEs – major challenges lie ahead, Ember says.
A number of central SOEs also have major interests in other parts of the coal ecosystem.
Central SOE China Shenhua, for example, spent 8bn yuan (about $1bn) on coal mining development and exploration, and only 824m yuan (about $113m) in hydropower in the first half of 2023, according to a report by CEF.
Nevertheless, Shenhua parent company CHN Energy’s overall portfolio still complies with SASAC’s general energy diversification goal, CEF says. This is largely due to another subsidiary – Longyuan Power – being one of the largest wind power companies in China.
The Ember report explains:
“This [coal-electricity] ecosystem is characterised by extensive cross-industry and cross-ownership linkages encompassing coal production and supply, logistics, the coal chemical industry, power generation and the manufacturing of related equipment and facilities. Consequently, an absolute decline in coal generation will inevitably impact other interconnected and interdependent segments of this system, with far-reaching ramifications, particularly within the broader socio-economic assemblages that have evolved around it.”
“Reduced coal generation presents substantial challenges”, says Yang, “economic restructuring, including switching to ‘green industry’, will require comprehensive support”.
The challenges are more significant in major coal-producing provinces, such as Shanxi. In 2022, coal and its related industry contributed 80% of tax revenues and provided 55% local jobs for the province, according to Chinese financial media outlet Caixin.
Ember says that this illustrates why diversification of power-sector SOEs is, on its own, insufficient. It explains:
“Diversification strategy by large generation SOEs is useful, as it weakens the incumbent utilities’ commitment to the existing coal-dominated power system, making deeper transition…possible. However, its effectiveness begins to wane when considering its inability to adequately address the tensions and conflicts that may arise from the absolute decline in coal power and the wider impacts associated with it.”
The report continues by suggesting that coal-dependent regions will also need to develop tailored diversification strategies to address the “unique challenges” they face. It says:
“By diversifying the economic base of these areas, a smoother transition can be facilitated, mitigating the adverse effects on local communities and workers who have long relied on the coal-electricity sectors.”
Yet challenges remain, Ember says, because clean-energy industries may not bring benefits to the same regions that have long relied on coal.
Yang says “the key issue here is not about the magnitude of the benefits [of renewable energy], but their distribution”. He adds:
“Many modelling studies have confirmed that the clean energy transition is beneficial and can create growth and jobs, more than sufficient to offset reduced economic activities from conventional fossil fuel supply chains.
“By leveraging their substantial resources and infrastructure, SOEs can lead the development and integration of renewable energy projects, enhance grid stability, and ensure a reliable energy supply.”
Finally, the report suggests that China takes the path of “gradualism and experimentation” to navigate the challenges inherent in the transition away from coal. It says:
“Often likened to ‘crossing the river by touching the stones’, these approaches are widely recognised as pivotal to China’s economic success. They allow for careful testing and adjustment of strategies and policies, facilitating the adaptation of broader policy directives into pragmatic, localised actions tailored to specific circumstances. Additionally, they help promote consensus-building among a diverse range of stakeholders by incorporating iterative improvements based on practical experience and feedback.”
The post ‘Critical turning point’ for coal poses risks for China’s state power firms, says report appeared first on Carbon Brief.
‘Critical turning point’ for coal poses risks for China’s state power firms, says report
Drought and heatwaves occurring together – known as “compound” events – have “surged” across the world since the early 2000s, a new study shows.
Compound drought and heat events (CDHEs) can have devastating effects, creating the ideal conditions for intense wildfires, such as Australia’s “Black Summer” of 2019-20 where bushfires burned 24m hectares and killed 33 people.
The research, published in Science Advances, finds that the increase in CDHEs is predominantly being driven by events that start with a heatwave.
The global area affected by such “heatwave-led” compound events has more than doubled between 1980-2001 and 2002-23, the study says.
The rapid increase in these events over the last 23 years cannot be explained solely by global warming, the authors note.
Since the late 1990s, feedbacks between the land and the atmosphere have become stronger, making heatwaves more likely to trigger drought conditions, they explain.
One of the study authors tells Carbon Brief that societies must pay greater attention to compound events, which can “cause severe impacts on ecosystems, agriculture and society”.
Compound events
CDHEs are extreme weather events where drought and heatwave conditions occur simultaneously – or shortly after each other – in the same region.
These events are often triggered by large-scale weather patterns, such as “blocking” highs, which can produce “prolonged” hot and dry conditions, according to the study.
Prof Sang-Wook Yeh is one of the study authors and a professor at the Ewha Womans University in South Korea. He tells Carbon Brief:
“When heatwaves and droughts occur together, the two hazards reinforce each other through land-atmosphere interactions. This amplifies surface heating and soil moisture deficits, making compound events more intense and damaging than single hazards.”
CDHEs can begin with either a heatwave or a drought.
The sequence of these extremes is important, the study says, as they have different drivers and impacts.
For example, in a CDHE where the heatwave was the precursor, increased direct sunshine causes more moisture loss from soils and plants, leading to a drought.
Conversely, in an event where the drought was the precursor, the lack of soil moisture means that less of the sun’s energy goes into evaporation and more goes into warming the Earth’s surface. This produces favourable conditions for heatwaves.
The study shows that the majority of CDHEs globally start out as a drought.
In recent years, there has been increasing focus on these events due to the devastating impact they have on agriculture, ecosystems and public health.
In Russia in the summer of 2010, a compound drought-heatwave event – and the associated wildfires – caused the death of nearly 55,000 people, the study notes.
The record-breaking Pacific north-west “heat dome” in 2021 triggered extreme drought conditions that caused “significant declines” in wheat yields, as well as in barley, canola and fruit production in British Columbia and Alberta, Canada, says the study.
Increasing events
To assess how CDHEs are changing, the researchers use daily reanalysis data to identify droughts and heatwaves events. (Reanalysis data combines past observations with climate models to create a historical climate record.) Then, using an algorithm, they analyse how these events overlap in both time and space.
The study covers the period from 1980 to 2023 and the world’s land surface, excluding polar regions where CDHEs are rare.
The research finds that the area of land affected by CDHEs has “increased substantially” since the early 2000s.
Heatwave-led events have been the main contributor to this increase, the study says, with their spatial extent rising 110% between 1980-2001 and 2002-23, compared to a 59% increase for drought-led events.
The map below shows the global distribution of CDHEs over 1980-2023. The charts show the percentage of the land surface affected by a heatwave-led CDHE (red) or a drought-led CDHE (yellow) in a given year (left) and relative increase in each CDHE type (right).
The study finds that CDHEs have occurred most frequently in northern South America, the southern US, eastern Europe, central Africa and south Asia.
Threshold passed
The authors explain that the increase in heatwave-led CDHEs is related to rising global temperatures, but that this does not tell the whole story.
In the earlier 22-year period of 1980-2001, the study finds that the spatial extent of heatwave-led CDHEs rises by 1.6% per 1C of global temperature rise. For the more-recent period of 2022-23, this increases “nearly eightfold” to 13.1%.
The change suggests that the rapid increase in the heatwave-led CDHEs occurred after the global average temperature “surpasse[d] a certain temperature threshold”, the paper says.
This threshold is an absolute global average temperature of 14.3C, the authors estimate (based on an 11-year average), which the world passed around the year 2000.
Investigating the recent surge in heatwave-leading CDHEs further, the researchers find a “regime shift” in land-atmosphere dynamics “toward a persistently intensified state after the late 1990s”.
In other words, the way that drier soils drive higher surface temperatures, and vice versa, is becoming stronger, resulting in more heatwave-led compound events.
Daily data
The research has some advantages over other previous studies, Yeh says. For instance, the new work uses daily estimations of CDHEs, compared to monthly data used in past research. This is “important for capturing the detailed occurrence” of these events, says Yeh.
He adds that another advantage of their study is that it distinguishes the sequence of droughts and heatwaves, which allows them to “better understand the differences” in the characteristics of CDHEs.
Dr Meryem Tanarhte is a climate scientist at the University Hassan II in Morocco, and Dr Ruth Cerezo Mota is a climatologist and a researcher at the National Autonomous University of Mexico. Both scientists, who were not involved in the study, agree that the daily estimations give a clearer picture of how CDHEs are changing.
Cerezo-Mota adds that another major contribution of the study is its global focus. She tells Carbon Brief that in some regions, such as Mexico and Africa, there is a lack of studies on CDHEs:
“Not because the events do not occur, but perhaps because [these regions] do not have all the data or the expertise to do so.”
However, she notes that the reanalysis data used by the study does have limitations with how it represents rainfall in some parts of the world.
Compound impacts
The study notes that if CDHEs continue to intensify – particularly events where heatwaves are the precursors – they could drive declining crop productivity, increased wildfire frequency and severe public health crises.
These impacts could be “much more rapid and severe as global warming continues”, Yeh tells Carbon Brief.
Tanarhte notes that these events can be forecasted up to 10 days ahead in many regions. Furthermore, she says, the strongest impacts can be prevented “through preparedness and adaptation”, including through “water management for agriculture, heatwave mitigation measures and wildfire mitigation”.
The study recommends reassessing current risk management strategies for these compound events. It also suggests incorporating the sequences of drought and heatwaves into compound event analysis frameworks “to enhance climate risk management”.
Cerezo-Mota says that it is clear that the world needs to be prepared for the increased occurrence of these events. She tells Carbon Brief:
“These [risk assessments and strategies] need to be carried out at the local level to understand the complexities of each region.”
The post Heatwaves driving recent ‘surge’ in compound drought and heat extremes appeared first on Carbon Brief.
Heatwaves driving recent ‘surge’ in compound drought and heat extremes
Greenhouse Gases
DeBriefed 6 March 2026: Iran energy crisis | China climate plan | Bristol’s ‘pioneering’ wind turbine
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Energy crisis
ENERGY SPIKE: US-Israeli attacks on Iran and subsequent counterattacks across the Middle East have sent energy prices “soaring”, according to Reuters. The newswire reported that the region “accounts for just under a third of global oil production and almost a fifth of gas”. The Guardian noted that shipping traffic through the strait of Hormuz, which normally ferries 20% of the world’s oil, “all but ground to a halt”. The Financial Times reported that attacks by Iran on Middle East energy facilities – notably in Qatar – triggered the “biggest rise in gas prices since Russia’s full-scale invasion of Ukraine”.
‘RISK’ AND ‘BENEFITS’: Bloomberg reported on increases in diesel prices in Europe and the US, speculating that rising fuel costs could be “a risk for president Donald Trump”. US gas producers are “poised to benefit from the big disruption in global supply”, according to CNBC. Indian government sources told the Economic Times that Russia is prepared to “fulfil India’s energy demands”. China Daily quoted experts who said “China’s energy security remains fundamentally unshaken”, thanks to “emergency stockpiles and a wide array of import channels”.
‘ESSENTIAL’ RENEWABLES: Energy analysts said governments should cut their fossil-fuel reliance by investing in renewables, “rather than just seeking non-Gulf oil and gas suppliers”, reported Climate Home News. This message was echoed by UK business secretary Peter Kyle, who said “doubling down on renewables” was “essential” amid “regional instability”, according to the Daily Telegraph.
China’s climate plan
PEAK COAL?: China has set out its next “five-year plan” at the annual “two sessions” meeting of the National People’s Congress, including its climate strategy out to 2030, according to the Hong Kong-based South China Morning Post. The plan called for China to cut its carbon emissions per unit of gross domestic product (GDP) by 17% from 2026 to 2030, which “may allow for continued increase in emissions given the rate of GDP growth”, reported Reuters. The newswire added that the plan also had targets to reach peak coal in the next five years and replace 30m tonnes per year of coal with renewables.
ACTIVE YET PRUDENT: Bloomberg described the new plan as “cautious”, stating that it “frustrat[es] hopes for tighter policy that would drive the nation to peak carbon emissions well before president Xi Jinping’s 2030 deadline”. Carbon Brief has just published an in-depth analysis of the plan. China Daily reported that the strategy “highlights measures to promote the climate targets of peaking carbon dioxide emissions before 2030”, which China said it would work towards “actively yet prudently”.
Around the world
- EU RULES: The European Commission has proposed new “made in Europe&