China And India Cut Fossil Fuel Power As Renewables Overtake Coal In 2025

China and India reduced fossil fuel generation by a combined 108 TWh as solar and wind surged across Asia
Renewables reached 33.8% of global electricity generation in 2025, overtaking coal at 33.0%
Solar and wind met 99% of global demand growth while coal generation fell by 63 TWh

Beijing and New Delhi delivered a decisive shift in global energy markets in 2025, cutting fossil fuel electricity generation even as demand continued to rise. The change reflects a broader structural pivot across Asia, where renewable energy is now meeting most new demand.

China’s fossil fuel generation fell 0.9%, or 56 terawatt-hours (TWh), during the year. At the same time, solar output surged 40%, adding 336 TWh. Solar alone met roughly two-thirds of the country’s additional electricity demand, reshaping how the world’s largest power market grows.

India followed a similar trajectory. Fossil generation declined 3.3%, or 52 TWh, while renewable output climbed 24%, adding 98 TWh. The shift highlights how emerging markets are beginning to decouple economic growth from fossil fuel expansion.

Together, the two countries remain dominant energy consumers. Fossil fuels still account for 58% of China’s electricity mix and 73% of India’s. However, the direction of travel has changed, with renewables now absorbing most incremental demand.

Global Coal Declines As Renewables Scale

The changes in Asia coincided with a broader global inflection point. Renewable energy accounted for 33.8% of global electricity generation in 2025, surpassing coal at 33.0%.

Coal generation fell by 63 TWh, marking its first annual decline since 2020. At the same time, solar and wind supplied 99% of global electricity demand growth, a signal that new capacity is overwhelmingly clean.

This transition is particularly visible in fast-growing economies. Instead of relying on additional coal or gas capacity, many are deploying renewables at scale to meet rising consumption. The result is a shift in the global supply mix that carries both economic and geopolitical implications.

For energy markets, the shift reduces exposure to fossil fuel price volatility. For policymakers, it offers a pathway to balance growth with emissions targets.

OECD Trends Reinforce Structural Change

Advanced economies have been moving in the same direction for longer, and their data reinforces the global trend. Fossil fuel generation across OECD countries has fallen 19% from its 2007 peak. In 2025, fossil sources accounted for 48% of OECD electricity, below the global average of 57%.

All 38 OECD member countries recorded fossil generation below peak levels in 2025. Over the same period, wind and solar generation rose by 2,138 TWh, offsetting declines in fossil output while meeting demand growth.

Power sector emissions in OECD countries dropped 28% from 2007 levels. The data points to a sustained transition rather than a short-term shift, driven by policy frameworks, market incentives, and technology cost declines.

Economics Tilt Further Toward Renewables

Cost competitiveness is now a central driver of the transition. In 2025, renewables maintained a clear advantage over fossil alternatives.

The average levelised cost of energy stood at $39 per megawatt-hour for solar and $40 per megawatt-hour for onshore wind. By comparison, combined cycle gas turbines averaged $102 per megawatt-hour.

This gap is reshaping investment decisions across both developed and emerging markets. Lower costs reduce the financial risk of large-scale renewable deployment while improving returns for developers and investors.

For corporate buyers, the economics strengthen the case for long-term power purchase agreements tied to renewable assets. For governments, they reduce the fiscal burden of supporting energy transitions.

What This Means For Leaders And Investors

The 2025 data points to a structural turning point rather than a cyclical change. Demand for electricity continues to rise, yet fossil fuels are no longer the default solution for meeting it.

For executives, the implications are immediate. Energy sourcing strategies will increasingly favor renewables, both for cost stability and compliance with climate targets. For investors, capital is likely to continue shifting toward clean generation, grid infrastructure, and storage.

Governments face a parallel challenge. Managing grid reliability while scaling renewables will require sustained policy focus and investment in transmission and flexibility solutions.

The global energy system is not yet post fossil fuels. China and India still rely heavily on them. However, the latest data shows that growth is now being captured by renewables.

That shift carries long-term consequences for emissions trajectories, energy security, and capital allocation. It also suggests that the pace of transition may accelerate faster than many forecasts assumed.