China's clean energy surge reduces coal use and expands exports

China is transitioning from a phase of building clean energy infrastructure to a phase of actively replacing its fossil fuel systems. According to a report from energy think tank Ember, coal generation has stopped growing in 17 of the 26 Chinese provinces and regions analyzed, including major industrial hubs like Shandong and Hunan. In 2025, thermal generation fell by 0.7% even as electricity demand increased by 5%.

Battery storage has become a critical component in managing the grid, overtaking pumped hydro as China’s largest source of installed energy storage capacity at the end of 2024. Battery capacity grew by 84% in 2025, with utilization rates roughly doubling since 2022.

Simultaneously, Chinese clean technology manufacturers are pivoting toward Southeast Asia to absorb massive manufacturing capacity amid rising trade tensions in Europe and North America. ASEAN countries have spent over $20 billion on Chinese-made clean technology in 2026, marking a 50% increase from the previous year. This makes Southeast Asia the largest market in Asia for Chinese clean tech components, including solar panels, batteries, electric vehicles, and grid equipment.