China’s top coal hub races to diversify as renewables overtake

BEIJING: Shanxi province, China’s largest coal-producing region, is accelerating its shift towards a clean and diversified energy structure as the country advances its commitments to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.

The province is systematically upgrading its industrial landscape.

Automated technologies and 5G networks are being deployed in underground mines to improve efficiency, while above-ground operations are transforming former coal subsidence areas into large-scale solar and wind power bases.

Concurrently, the region is integrating hydrogen-powered commercial vehicles into its freight routes, utilising geothermal resources for district heating and capturing coal-mine methane for power generation.

As a major energy base, Shanxi’s industrial transformation is considered a crucial component of China’s broader decarbonisation efforts, testing how resource-dependent regions can upgrade their economies while safeguarding national energy security.

This transition was a focal point of the recently concluded 2026 Taiyuan Energy Low Carbon Development Forum, co-hosted by the Foreign Affairs Ministry, the National Energy Administration (NEA) and the Shanxi provincial government.

“China’s continuous breakthroughs in new energy technologies and its maturing market have created favourable conditions and set an example for the global low-carbon power transition, especially for developing nations,” said Liu Zhenmin, China’s special envoy for climate change, at the forum.

“With international energy market volatility accelerating this year, the diverse energy supply and structure of China have demonstrated robust resilience, injecting stability into the global market.”

With China’s coal-fired power generation dropping below 50% for the first time in the first half, historically coal-reliant regions are navigating a profound macroeconomic shift.

As of the end of July, China’s installed solar power capacity surpassed coal for the first time to become the country’s largest single power source, an historic milestone that fundamentally reshapes the nation’s energy supply landscape and accelerates its ongoing green, carbon-cutting transition, said the NEA.

Consequently, the role of coal-fired power is undergoing a profound structural shift, from a foundational baseload provider to a flexible, more auxiliary supportive power source, throttling down output to make room for renewable energy absorption, while ramping up and filling in grid gaps at night or during cloudy weather when solar generation drops.

Liu stressed that Shanxi plays a key role in this transition. During the 2021 to 2025 period, the province produced 6.5 billion tonnes of raw coal — nearly 30% of the national total — and supplied two billion tonnes of thermal coal to 24 provincial regions.

Despite this massive legacy, the province is rapidly breaking its path dependency.

In 2025, Shanxi’s new and clean energy power generation grew 24.2%, and its exported green electricity trading volume jumped 31.3%.

Liu encouraged the province to rely on coal as a stabilising baseline while actively developing new sectors, demonstrating that managing immediate risks and pursuing long-term green growth actually support one another.

The macroeconomic backdrop of Shanxi’s transition is defined by a structural shift characterised by “green expansion and coal stabilisation”.

While China’s installed renewable energy capacity has ranked first globally for consecutive years, policymakers are prioritising grid stability.

The 15th Five-Year Plan (2026 to 2030) features a “non-fossil energy 10-year doubling action” as a core objective. Notably, the plan also formally incorporated peak-shaving capacity into the national target metrics for the first time. — China Daily/ANN