Global coal capacity grows 3.5% while generation falls 0.6% in 2025
China and India account for 95% of new coal plant construction
Renewables meet rising demand, reducing utilisation of new coal capacity globally
Global coal power capacity grew by 3.5% in 2025 while actual coal-fired electricity generation dropped by 0.6%, according to a report published by Global Energy Monitor (GEM).
This data reflected a structural shift where new plants are commissioned but remain underutilised due to the rapid expansion of renewable energy sources.
1 May 2026
Get the latest issue of Outlook Business
The GEM report further stated that China and India drive most of this growth, currently accounting for 95% of all new coal plant construction worldwide. Despite building new capacity, both nations saw coal generation fall as record-breaking wind and solar additions met almost all new demand. China’s coal capacity rose by 6%, but its generation declined by 1.2%. India showed a similar trend, with capacity increasing by 3.8% and generation falling by 2.9%.
Globally, the footprint of coal is shrinking, with only 32 countries still proposing or building new plants, down from 75 in 2014. Latin America reached a 'No New Coal' status in 2025 after Brazil and Honduras removed their remaining proposals. Furthermore, South Korea committed to a complete coal phaseout by the year 2040.
Renewables Displace Coal Generation
In India, non-fossil fuel sources now exceed 50% of total installed power capacity for the first time, reaching 267 GW. Solar power is increasingly vital for energy security, helping meet record electricity peaks during intense spring heatwaves. From January to April 2026, Indian coal generation was 2% lower than the same period in 2025.
However, the government still targets adding 100 GW of coal capacity over the next seven years. Global retirement of old plants is slowing down, with nearly 70% of units scheduled to retire in 2025 remaining operational.
In the United States and European Union, plants were kept online due to government intervention following market disruptions. Indonesia’s coal fleet grew by 7% in 2025, largely for industrial processing. Pakistan uses distributed solar to stabilise markets, while Bangladesh lacks renewable capacity. Zimbabwe and Zambia represent two-thirds of African coal development. Turkey has only one active proposal remaining. Experts state the challenge remains persistence of pro-coal policies.
