China’s climate and energy policies present something of a paradox: while expanding clean energy at breakneck speed, China has also been building new coal power plants.
In 2023 alone, 70 gigawatts (GW) of new coal-fired power capacity was constructed in China, up four-fold since 2019 and accounts for 95% of the world’s new coal power construction activity in that year.
This surge of coal capacity raises concerns about China’s carbon dioxide (CO2) emissions and climate goals, as well as the risk of stranded assets down the line.
Coal is being pitched by the Chinese government as the means to guarantee energy security and to meet rapidly-rising peaks in electricity demand, because solar and wind output is variable.
At the same time, China’s electricity sector is seeing major changes in terms of costs, demand patterns, regulation and market operation. Our new study indicates that the traditional economic calculus used to justify new coal capacity may be outdated.
Using a simple, analytical metric for evaluating the most economic way to meet peak demand, we show that a combination of solar plus battery storage may be a more cost-effective option than new coal.
- How has China’s electricity landscape changed?
- How does an alternative metric evaluate the cost?
- What is the most economic way to meet peak demand?
- How can our solution help China with its climate goals?
How has China’s electricity landscape changed?
Over the past decade, the costs of renewables and battery storage have decreased substantially, peak-time residential and commercial demand has surged, and wholesale electricity markets have gained greater traction.
Meanwhile, China also announced “dual carbon” goals of peaking CO2 emissions before 2030 and reaching carbon neutrality by 2060. Given these transformations, building more unabated coal power conflicts with China’s long-term climate commitments and may no longer be the most cost-effective option to meet demand growth. It also diverts much-needed capital from the transition toward a clean power system.
How does an alternative metric evaluate the cost?
Our study introduces an alternative metric for calculating the cost-optimal investments needed to meet rising peak electricity demand.
This metric, “net capacity cost”, is the annualised fixed costs of investment in infrastructure needed to meet peak demand minus electricity market revenues earned by this infrastructure, or its “system value”. In this metric, a negative figure means that instead of a cost, such investments would turn a profit.
To explore this metric in a Chinese context, we use a simple example of a 1,500 megawatt (MW) increase in peak electricity demand and a 6,570 gigawatt hour (GWh) rise in demand across a full year, in a hypothetical province.
We then outline five strategies (cases) for meeting these peak and annual energy demands, ranging from heavy reliance on coal through to a combination of solar and battery storage.
In the different cases, resources are sized based on how much they can reliably contribute to peak supply needs and annual energy needs:
- Case 1: New coal power capacity meets all of the growth in both peak and annual energy demand.
- Case 2: Solar meets 70% and coal meets 30% of annual energy demand growth; solar contributes 525MW to peak supply needs – based on a “capacity credit” to discount solar capacity because it may not generate during peak periods – while coal provides the remaining 975MW.
- Case 3: Solar meets all annual energy demand growth; solar and coal both contribute 750MW to peak supply needs, again discounting solar with a capacity credit.
- Case 4: Solar meets all annual energy demand growth; solar and batteries both contribute 750MW to peak supply needs; batteries provide frequency regulation reserves (backup power for managing minute-to-minute differences between supply and demand).
- Case 5: Solar meets all annual energy demand growth; solar and batteries both contribute 750MW to peak supply needs; batteries provide energy arbitrage (charge when prices or costs are low, discharge when they are high).
For each case, shown in the table below, we calculated the annual net cost for both the individual resource (coal, battery or solar), as well as for the system as a whole for securing one kilowatt (kW) of power generation capacity in yuan per year.
The resource net capacity cost in the top half of the table is the net cost of that resource (i.e., the annualised fixed cost minus annual revenue that resource earns from providing energy and ancillary services, such as frequency regulation). Positive numbers show a net cost to the grid operator in adding or procuring that resource.
The total system net capacity cost, in the second half of the table, is the net cost of meeting peak demand growth with the combination of resources in each case.
The weighting that we used to calculate system net costs is based on the ratio of installed capacity and peak demand growth.
Cost of different combinations of energy sources to meet electricity demand
| Case 1 | Case 2 | Case 3 | Case 4 | Case 5 | |
|---|---|---|---|---|---|
| Resource net capacity cost (yuan per kW per year, per kW of installed capacity) | |||||
| Coal | 424 | 424 | 512 | ||
| Battery | 248 | 781 | |||
| Solar | -128 | -128 | -128 | -128 | |
| System net capacity cost (yuan per kW per year, per kW of capacity used to meet peak demand, after capacity credit) | |||||
| Coal | 471 | 306 | 236 | ||
| Battery | 138 | 434 | |||
| Solar | -223 | -319 | -319 | -319 | |
| Total | 471 | 83 | -83 | -181 | 115 |
Cost of capacity with different combinations of coal, solar and storage for meeting peak demand. Source and credit: Lin and Kahrl (2024)
In order to stress-test this simple analysis, we looked at sensitivities of a variety of prices for different sources.
With solar prices in China already very low, our sensitivity analysis focused on the price of coal, batteries and other inputs to the analysis.
What is the most economic way to meet peak demand?
Our results indicate that when battery storage provides frequency regulation reserves (case 4), a combination of solar and storage is the most cost-effective option for meeting peak demand growth.
This combination could cost grid operators -181 yuan (about -$25 or -£20) for each kilowatt of capacity added.
In contrast, building new coal capacity to meet peak demand growth (case 1) is the most expensive option, with a net capacity cost of 471 yuan (about $65 or £52) for securing one kilowatt of capacity per year.
Case 3, in which large coal power plants are only used for backup power (little to no generation), may not be politically feasible in China, at least in the near term.
The other two cases (case 2 and case 5) are more comparable, but given that battery prices have fallen by more than 30% since this analysis was performed – to about 1 yuan (about $0.14 or £0.11) per watt-hour (Wh) of capacity – the batteries in case 5 are likely more economically attractive than the coal in case 2.
How can our solution help China with its climate goals?
To navigate this changing landscape, our analysis suggests that a near-term strategy for meeting China’s rising energy demand while also working towards its climate goals involves enabling battery storage participation in electricity markets.
Currently, the Chinese government allows “new energy storage”, including batteries, to participate in the electricity market. However, the detailed regulations are ambiguous and battery participation could be made simpler.
For example, battery storage is not allowed to provide “operational reserves” referring to capacity that is held in reserve to manage unexpected differences between supply and demand. Making battery storage eligible for this would enhance its business case.
Allowing greater market participation for battery storage would foster continued innovation and cost reductions in battery storage systems, while offering valuable operational experience for system operators.
Such a strategy would be consistent with market outcomes and reflects recent electricity market experience in the US and Europe.
It would also help to resolve near-term capacity and energy needs, as batteries and solar generation can typically be built more quickly than coal-fired power plants.
Moreover, it would help to alleviate future conflicts between new coal generation and renewable energy. New coal generation built mainly as a backup for renewable generation will either rarely operate or encroach on operating hours and net income for other existing coal generators, creating new stranded asset risks.
Continued electricity market reforms would also facilitate more efficient investments in renewable generation and electricity storage.
Allowing wholesale electricity prices to be set by the market and allowing renewable generation and electricity storage to participate in wholesale markets can enhance their revenue and profits.
Furthermore, the reforms would encourage the efficient utilisation of electricity storage, which is our key finding. Electricity storage can provide a variety of functions for the electricity system; wholesale prices can help to guide the operation of storage toward those functions that have the highest value at the lowest cost.
The recent directive from China’s national energy administration (NEA) that integrates new types of storage facilities (non-pumped hydro) into grid dispatch operation is a step towards the reforms we outline.
Appropriate compensation mechanisms, such as capacity payments in some provinces, for all the services that such storage facilities provide, may need to be further defined to promote the sustainable development and integration of these storage facilities into the grid.
Finally, additional supply alone is unlikely to be the lowest-cost way to meet growth in electricity demand in China. Improving end-use efficiency and “demand response” can also help to reduce the overall cost of supplying electricity.
As China continues its electricity market reforms, regional market designs linking multiple provinces, as well as and regional approaches to resource adequacy that encourage resource sharing among provinces, could also help to meet China’s rising electricity use and peak demand in the most cost-effective and lowest-carbon way possible.
The post Guest post: Solar plus batteries ‘cheaper than new coal’ for meeting China’s rising demand appeared first on Carbon Brief.
Guest post: Solar plus batteries ‘cheaper than new coal’ for meeting China’s rising demand
Climate Change
Q&A: “False” climate solutions help keep fossil fuel firms in business
From cross-border pipelines for green hydrogen that can also carry natural gas, to sustainable aviation fuel that threatens forests, and costly carbon capture projects that are used to recover more oil, “false solutions” to climate change have gained ground in recent years, often backed by fossil fuel firms.
A new research paper, published last month in the journal Energy Research and Social Science, shines a light on this trend, exploring such projects that have also caused environmental injustices such as air pollution or depriving communities of their source of income.
The study by the Institute of Environmental Science and Technology at the Universitat Autònoma de Barcelona (ICTA-UAB), in collaboration with the University of Sussex, is based on 48 cases of environmental conflicts around the world, contained in the ICTA-UAB’s Global Atlas of Environmental Justice (EJAtlas).
The selected cases range from Norway’s Trollvind offshore wind farm, built partly to decarbonise the power supply to the Troll and Oseberg oil and gas fields; to US fossil fuel firms working with the dairy industry to turn manure into biogas; and a tree plantation in the Republic of Congo proposed by TotalEnergies, where locals say they have been prevented from accessing their customary farmland.
“House of cards”: Verra used junk carbon credits to fix Shell’s offsetting scandal
The researchers argue that “false solutions” – which also include large-scale carbon offsetting projects, many of which have been discredited – help to reinforce the political and economic power of the industry that is responsible for the climate crisis, and are undermining the global energy transition.
Climate Home News spoke to co-author Freddie Daley, a research associate at the University of Sussex’s Centre for Global Political Economy, about the paper’s findings and implications for climate policy.
Q: What was your motivation in exploring these types of “false solutions” to the climate crisis?
A: It’s very much a reaction to the fossil fuel industry insisting these technologies are solutions, rather than us creating a typology of things that are not working. All of the [paper’s] authors are very keen on a habitable planet – and we’re not going to let perfection be the enemy of the good.
But this is a call [to] arms to say that governments need to be very careful about what they’re giving public subsidy to, because in a complex situation – where there’s an urgency for reducing emissions but also for creating sustainable livelihoods and for ensuring that the needs of people living in and around these projects are met – I think it’s very important to scrutinise the viability of these schemes.
The starting point was off the back of oil majors – or so-called integrated energy companies – coming out and being very bullish on sustainability and net zero, and alongside this, proffering that they were part of the solution to climate mitigation, energy transition, job creation, green growth. And we took this as a problem statement to begin our analysis: How can fossil companies be part of the solution?
Q: What did your work reveal about “false solutions” and how can it deepen understanding of them?
A: “False solutions” is a term that’s been used for many, many years by Indigenous groups and by frontline communities – so we wanted to formalise it because it’s not really been engaged with in academic literature so far. We thought it was quite a big gap that needed to be filled.
We thought how can we categorise it? How can we help redefine it? What are the characteristics of these false solutions? So we dug into the data, the EJ Atlas, across many technologies – from hydrogen through to carbon offsets and biofuels, but also renewable energy projects, because we were finding that renewable energy projects causing conflicts were either being used to fuel fossil fuel production, such as solar panels or wind turbines to run rigs, which we thought was an interesting pattern – and also utility-scale renewable energy projects which were operated by fossil fuel firms.
Out of total energy generation, fossil fuel companies’ production of renewables is a tiny, tiny fraction. Why do these projects exist, and how do they operate within the broader energy system? We wanted to look at what their function was – and going through the data and the lived experience of the communities on the frontlines of these projects, we found that they’re very much used to legitimise fossil fuel expansion or just continued operation.
Is the world’s big idea for greener air travel a flight of fancy?
And then we also looked at the governmental role within the institutions as well – so fossil fuel firms using these technologies and these false solutions as ways to garner public subsidy, particularly for carbon capture and storage (CCS) and hydrogen, to some degree.
And what we found across all these cases was they did very little to reduce emissions and generated environmental conflicts… and they ultimately delayed an energy transition, or the sort of industrial transformation that’s required to deliver deep and rapid emissions cuts.
Q: Shouldn’t fossil fuel companies be able to use all the climate solutions available to help reduce their emissions while the world is transitioning away from coal, oil and gas?
A: My response [to that argument] is to actually look at the data. When people say hydrogen and CCS are very important and they’re crucial, I don’t disagree with the idea that we might need some sort of technology to suck carbon out the atmosphere at some point in the future. But currently, the operational projects are not delivering that, and fossil fuel projects should not be expanded on the premise that future technologies can undo their emissions.
Just a few weeks ago, the Financial Times ran a very big story about how most of the oil majors have cancelled all their hydrogen projects because the scale of it’s not there yet, and they don’t think it’s going to stack up. These are companies with huge amounts of capital in an easy-to-abate sector – energy – saying we’re not going to do this. So you have to question the plan of hydrogen as a solution, if even the people that have the expertise and the capital to make it work are saying we’re not going to do this because we cannot make it work.
Likewise with carbon capture, many of the large energy projects and energy producers that have garnered vast amounts of public subsidies on the promise that they will do carbon capture are cutting those research projects down.
So at this stage in the energy transition – which some people call the “mid transition”, the difficult part – I think we need to scrutinise these technologies and look at what they do deliver on a project-by-project basis, and then on an aggregate basis.
Q: High-carbon industries say they need government subsidies to cover the high cost of researching, developing and creating markets for new technologies to help combat climate change. Is this justified?
A: I’m a big believer in the idea that the energy transition – the ideal energy transition, which is one of scaling up new industry while phasing out an old one – is going to require not only public money, but public coordination. That means states actively stewarding investment, picking winners and sequencing what is going to be a highly disruptive process.
I think public subsidy is necessary. We need to see deep and rapid decarbonisation, especially in wealthy industrialised states, but it should be used in a very targeted way to scale up technologies which have a marked impact on emissions and also uplift welfare as well – so heat pumps insulating homes in poorer communities. With these sort of things, you get your bang for your buck.
Comment: The battle over a global energy transition is on between petro-states and electro-states
You don’t get bang for your buck giving BP and Shell money to pilot a carbon capture and storage facility. It’s an extension of existing relationships between big business and government that needs to be looked at closely in the context of energy transition, because ultimately, these companies are not serious about transitioning at the requisite speed or scale to stave off climate disaster.
Look at both oil and gas companies’ ownership of renewable assets (1.42% of operational renewable projects around the world) and the renewables share of their primary generation (0.13%). They have the capital, and they have the know-how to do this. They haven’t done it. The question is, why do they need more public subsidy to continue not doing it?
This interview was shortened and edited for clarity.
The post Q&A: “False” climate solutions help keep fossil fuel firms in business appeared first on Climate Home News.
Q&A: “False” climate solutions help keep fossil fuel firms in business
Climate Change
States Say They Need More Help Replacing Lead Pipes. Congress May Cut the Funding Instead.
The U.S. House voted to cut millions promised for the work this year. The Senate will vote this week, as advocates and some lawmakers push back.
The Senate is taking up a spending package passed by the House of Representatives that would cut $125 million in funding promised this year to replace toxic lead pipes.
States Say They Need More Help Replacing Lead Pipes. Congress May Cut the Funding Instead.
Climate Change
6 books to start 2026
Here are 6 inspiring books discussing oceans, critiques of capitalism, the Indigenous fight for environmental justice, and hope—for your upcoming reading list this year.

The Deepest Map: The High-Stakes Race to Chart the World’s Oceans
by Laura Trethewey (2023)
This book reminds me of the statement saying that people hear more about the moon and other planets in space than what lies beneath Earth’s oceans, which are often cited as ‘scary’ and ‘harsh’. Through investigative and in-depth reportage, ocean journalist and writer Laura Trethewey tackles important aspects of ocean mapping.
The mapping and exploration can be very useful to understand more about the oceans and to learn how we can protect them. On the other hand, thanks to neoliberal capitalism, it can potentially lead to commercial exploitation and mass industrialisation of this most mysterious ecosystem of our world.
The Deepest Map is not as intimidating as it sounds. Instead, it’s more exciting than I anticipated as it shows us more discoveries we may little know of: interrelated issues between seafloor mapping, geopolitical implications, ocean exploitation due to commercial interest, and climate change.

The Code of Capital: How the Law Creates Wealth and Inequality
by Katharina Pistor (2019)
Through The Code of Capital, Katharina Pistor talks about the correlation between law and the creation of wealth and inequality. She noted that though the wealthy love to claim hard work and skills as reasons why they easily significantly generate their fortunes, their accumulation of wealth would not last long without legal coding.
“The law is a powerful tool for social ordering and, if used wisely, has the potential to serve a broad range of social objectives: yet, for reasons and with implications that I attempt to explain, the law has been placed firmly in the service of capital,” she stated.
The book does not only show interesting takes on looking at inequality and the distribution of wealth, but also how those people in power manage to hoard their wealth with certain codes and laws, such as turning land into private property, while lots of people are struggling under the unjust system.

The Intersectional Environmentalist: How to Dismantle Systems of Oppression to Protect People + Planet
by Leah Thomas (2022)
Arguing that capitalism, racism, and other systems of oppression are the drivers of exploitation, activist Leah Thomas focuses on addressing the application of intersectionality to environmental justice through The Intersectional Environmentalist. Marginalised people all over the world are already on the front lines of the worsening climate crisis yet struggling to get justice they deserve.
I echo what she says, as a woman born and raised in Indonesia where clean air and drinkable water are considered luxury in various regions, where the extreme weather events exacerbated by the climate crisis hit the most vulnerable communities (without real mitigation and implementations by the government while oligarchies hijack our resources).
I think this powerful book is aligned with what Greenpeace has been speaking up about for years as well, that social justice and climate justice are deeply intertwined so it’s crucial to fight for both at the same time to help achieve a sustainable future for all.

As Long As Grass Grows
by Dina Gilio-Whitaker (2019)
Starting with the question “what does environmental justice look like when Indigenous people are at the centre?” Dina Gilio-Whitaker takes us to see the complexities of environmental justice and the endless efforts of Indigenous people in Indian country (the lands and communities of Native American tribes) to restore their traditional cultures while healing from the legacy of trauma caused by hundreds of years of Western colonisation.
She emphasizes that what distinguishes Indigenous peoples from colonisers is their unbroken spiritual relationship to their ancestral homelands. “The origin of environmental justice for Indigenous people is dispossession of land in all its forms; injustice is continually reproduced in what is inherently a culturally genocidal structure that systematically erases Indigenous people’s relationships and responsibilities to their ancestral places,” said Gilio-Whitaker.
I believe that the realm of today’s modern environmentalism should include Indigenous communities and learn their history: the resistance, the time-tested climate knowledge systems, their harmony with nature, and most importantly, their crucial role in preserving our planet’s biodiversity.

The Book of Hope
by Jane Goodall and Douglas Abrams with Gail Hudson (2021)
The Book of Hope is a marvelous glimpse into primatologist and global figure Jane Goodall’s life and work. The collaborator of the book, journalist Douglas Abrams, makes this reading experience even more enjoyable by sharing the reflective conversations between them, such as the definition of hope, and how to keep it alive amid difficult times.
Sadly, as we all know, Jane passed away this year. We have lost an incredible human being in the era when we need more someone like her who has inspired millions to care about nature, someone whose wisdom radiated warmth and compassion. Though she’s no longer with us, her legacy to spread hope stays.

Ocean: Earth’s Last Wilderness
by David Attenborough and Colin Butfield (2025)
“I could only have dreamed of recording in the early stages of my career, and we have changed the ocean so profoundly that the next hundred years could either witness a mass extinction of ocean life or a spectacular recovery.”
The legend David Attenborough highlights how much humans have yet to understand the ocean in his latest book with Colin Butfield. The first part of it begins with what has happened in a blue whale’s lifetime. Later it takes us to coral reefs, the deep of the ocean, kelp forest, mangroves, even Arctic, Oceanic seamounts, and Southern Ocean. The book contains powerful stories and scientific facts that will inspire ocean lovers, those who love to learn more about this ecosystem, and those who are willing to help protect our Earth.
To me, this book is not only about the wonder of the ocean, but also about hope to protect our planet. Just like what Attenborough believes: the more people understand nature, the greater our hope of saving it.
Kezia Rynita is a Content Editor for Greenpeace International, based in Indonesia.
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