China’s clean energy push signals global fossil fuel decline

China’s rapid embrace of renewables and economy-wide electrification is reshaping the world’s energy future, with ripple effects likely to trigger a global decline in fossil fuel demand, according to a new report.

The report, titled China Energy Transition Review 2025 by global energy think tank Ember, highlighted China’s unparalleled pace of clean energy investment and deployment. In 2024, the country spent $625 billion on clean energy — 31 per cent of the global total. Wind and solar capacity more than doubled in just three years, reaching 1,408 gigawatts (GW). By early 2025, renewables overtook coal in installed capacity, while battery storage surged, expanding 69 per cent year-on-year.

Wind and solar generation rose 25 per cent in 2024 and 27 per cent in the first half of 2025, outstripping demand growth and cutting fossil fuel generation by 2 per cent. In the 12 months to June 2025, solar and wind produced more electricity than hydro, nuclear and bioenergy combined — an unprecedented shift in the energy mix of the world’s largest power system.

Electrification is spreading across the economy, the findings indicated. In 2023, electricity supplied 32 per cent of final energy demand, compared to 24 per cent in the United States and European Union. It overtook coal as the main energy source in industry and dominates in buildings at 39 per cent. Electric vehicles, heat pumps and industrial electrification are displacing fossil fuels in transport, heating and manufacturing.

China’s clean energy transition is underpinned by strategic goals beyond climate, the authors of the report observed. Facing limited fossil reserves and high import dependence, Beijing views renewables as essential to energy security, economic competitiveness and its long-term vision of an “ecological civilisation”, they wrote.

Clean technologies generated 13.6 trillion renminbi ($1.9 trillion) in economic output in 2024, roughly a tenth of its GDP, and are growing three times faster than the overall economy.

The global impact is profound, the report showed. China manufactures about 80 per cent of solar panels, 60 per cent of wind turbines and the majority of batteries and electric vehicles, driving dramatic cost reductions worldwide. Battery pack prices have plunged to $60 per kWh, making EVs cheaper than petrol cars in China. Solar and wind are now the lowest-cost power in most regions, with 91 per cent of new projects globally cheaper than fossil alternatives.

Chinese firms also dominate innovation, accounting for 75 per cent of global clean energy patent applications, according to the analysis. This technological and manufacturing scale means China alone can supply more solar capacity in 2030 than the International Energy Agency projects the world will need in its Net Zero pathway.

Emerging economies are among the biggest beneficiaries. Affordable Chinese technologies have enabled 25 per cent of emerging markets to leapfrog the US in electrification, and 63 per cent now generate a higher share of power from solar than US.

The report stated that China is pushing global fossil fuel demand towards structural decline. With renewables surging, electrification spreading and coal use plateauing, the world’s top energy consumer is signaling that a fossil-fuelled development model is no longer viable. Instead, China is demonstrating how decarbonisation can align with industrial growth, job creation, and improved quality of life — an example other nations are now challenged to follow.

For Southeast Asia and other emerging markets, the task ahead is to translate that possibility into tailored strategies, said Suwit Khunkitti, Chair, Advisory Committee of the International Society for Energy Transition Studies. “The choices we make today will shape the direction of our economies and the well-being of generations to come. To build a better future, one of the most promising paths lies in seizing the opportunities of the energy transition — and doing so together.”