IEEFA – LNG is not displacing coal in China's power mix

In China, LNG is not playing a significant role in transitioning away from coal in the power sector. Despite efforts to promote clean energy, the share of gas-fired electricity has remained low at 3%, while wind and solar power have seen significant growth to 16% of the power mix. China's focus on domestic energy resources and policies to limit coal-to-gas switching and LNG imports show a preference for other energy sources. The high cost of LNG compared to coal, along with the declining costs of renewables, poses a challenge to gas-fired generation. Claims that LNG can serve as a bridge to clean energy by displacing coal in China's power mix are not supported by recent developments in the energy sector. The report suggests that LNG is unlikely to meaningfully replace coal in China's power generation due to various factors.