China’s coal power reckoning: stranded assets under a 1.5°C climate pathway

Chinese scientists have published a forward-looking study in Applied Energy that quantifies the potential scale of stranded coal power assets in China under the 1.5°C global warming threshold. Led by Bo Li and colleagues, including researchers from Tsinghua University, the paper models the gap between China’s current coal-fired capacity and what would remain economically viable under stringent climate constraints. The findings are as stark as they are timely: a significant portion of China’s coal fleet, much of it built only in the last decade, may become uneconomical to operate before the end of its technical lifespan.

This is not merely an academic exercise. China operates the world’s largest coal power fleet, and decisions made today about new plant construction and existing plant retirement will shape global carbon trajectories for decades. The study provides a granular, plant-by-plant assessment that accounts for age, efficiency, and regional electricity demand, offering a roadmap for policymakers and investors alike. For China, the strategic question is not whether to phase down coal, but how to manage the transition in a way that maximizes energy security while minimizing financial fallout. The research suggests that without early and deliberate action, the volume of stranded assets could impose billions of dollars in losses on utilities, banks, and provincial governments.

Why it matters:
This research offers a crucial stress test for China’s energy investment strategy. For global investors and energy analysts tracking China’s decarbonisation trajectory, the findings underscore that the window for a cost-effective coal phase-down is narrowing fast.

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