Coal power plants expanded while renewable energy overtook fossil generation
The world built more coal-fired power plants in 2025, yet generated less electricity from coal. According to the report Boom and Bust Coal 2026 by the Global Energy Monitor, global coal infrastructure reached its highest level of new construction in a decade, even as coal-fired generation continued to decline.
The state of coal power plants worldwide
Nearly 100 GW of new coal capacity came online in 2025, equivalent to roughly 100 large-scale thermal power stations.
At the same time, however, coal development became increasingly concentrated geographically. The number of countries proposing or building new coal plants fell from 38 in 2024 to 32 in 2025. Among the countries exiting the coal pipeline were South Korea, which committed to phasing out coal by 2040, along with Brazil and Honduras, leaving Latin America without any new coal plant proposals.
Coal is no longer the primary source of power generation
The report explains that as the gap widens between installed coal capacity and the electricity actually generated, coal plants are increasingly being maintained not as primary generation assets, but as a form of “system insurance,” valued more for emergency availability than for daily operation.
This trend was evident in 2025 both in countries with large domestic coal reserves, such as China, India and the United States, and in coal-importing regions.
China and India used coal to support renewable expansion
According to the GEM report, 95% of all new coal plants built in 2025 were concentrated in China and India. In both countries, concerns over energy security and growing industrial electricity demand pushed governments to complete large infrastructure projects planned years earlier.
Yet despite record growth in installed coal capacity, total global coal-fired electricity generation declined by 0.6%. The sharpest declines were recorded precisely in China and India, where most of the new plants entered operation.
The contraction in coal generation was driven directly by record global output from wind and solar energy, combined with broader structural and economic factors. In 2025, renewable energy sources covered the entire increase in global electricity demand. Renewables effectively surpassed coal.
As the report notes, the very conditions making coal appear necessary are also making it increasingly redundant. In China and India, coal plants are being built primarily to support renewable expansion that is already replacing them.
Coal decline continued across the European Union
Coal capacity across the European Union continued to decline in 2025, although energy security concerns slowed the pace of planned shutdowns.
Coal’s share of the regional electricity mix kept shrinking as older plants retired and overall utilization rates fell. Over the last decade, the EU retired nearly 68 GW of coal capacity, close to the 81 GW still operating as of December 2025.
Coal utilization across the bloc fell by 37% between 2015 and 2025, while dependence on coal for baseload generation became increasingly rare.
Despite lower electricity output, however, plant closures in 2025 proceeded more slowly than expected. Less than half the coal capacity retired in 2024, about 11.6 GW, was shut down in 2025. Of the coal units scheduled for retirement or conversion during the year, 69% failed to complete the process. Out of 35 missed retirements, 28 were postponed to future dates across six countries.
Aging fossil infrastructure does not guarantee energy resilience
Many of these delayed retirements were deliberate responses to geopolitical uncertainty. Some countries, including Spain, used international crises to accelerate coal phase-outs. Others used the same crises to justify slowing their exit from coal.
Italy, which had originally planned to phase out coal by 2025, decided instead to place its remaining coal plants into strategic reserve, citing geopolitical volatility. In 2025, the country’s coal phase-out timeline was first delayed to 2029 and later pushed back again to 2038 following the U.S.-Israel war against Iran.
Higher oil and gas prices may temporarily improve coal’s competitiveness in power markets, increasing the possibility of a short-term rebound in European coal demand. However, outdated fossil infrastructure does not automatically ensure system resilience.
With an average coal plant age of 42 years, well above the global retirement average, Europe faces growing operational and maintenance risks tied to continued reliance on aging infrastructure.
Coal remains vulnerable to global fossil fuel volatility
Coal prices in Europe are also heavily influenced by global fossil fuel markets. During the first weeks of Russia’s invasion of Ukraine in 2022, European coal prices surged nearly 130% as oil and gas markets tightened, demonstrating that coal, like gas, remains highly exposed to global market volatility.
For coal-importing countries, this volatility, which can temporarily make coal more competitive than gas, also creates stronger incentives to abandon fossil fuels altogether.
The 2021-2022 energy crisis demonstrated this dynamic clearly: rising gas prices also pushed up coal prices, accelerating clean energy deployment rather than triggering a durable coal resurgence.
Delayed retirements highlighted by the United States
Globally, nearly 70% of coal units scheduled for retirement in 2025 remained operational.
The United States became one of the clearest examples of this trend. In the U.S., 59% of planned coal plant retirements for 2025 were frozen. The delays were not driven by market economics, but by direct government intervention aimed at keeping aging thermal plants online to stabilize the power grid.
That political decision came with significant economic costs. Maintaining inefficient legacy coal plants required hundreds of millions of dollars in additional spending. Those costs were ultimately passed on to consumers, contributing to a 7% annual increase in average household electricity bills.
Coal power plants face irreversible structural decline
The report concludes that the underlying economics of the coal sector have changed fundamentally and permanently.
The continuous decline in renewable energy costs, especially for wind and solar power, has made coal economically uncompetitive. In many electricity markets, renewable energy sources benefit from dispatch priority and lower operating costs, forcing coal plants to run for fewer hours each year.
Lower utilization rates drastically reduce profitability for fossil fuel infrastructure, often making coal plants financially unsustainable without massive public subsidies or regulatory protection.
As a result, the global energy transition has entered an irreversible structural phase. While political decisions and short-term energy security strategies may still support the construction of new fossil infrastructure, electricity markets themselves have already shifted decisively away from coal, driven by the economic and technological competitiveness of clean energy.