July 3, 2025 - 

Key Findings

The April 2025 power outage in Spain raised questions about renewable energy reliability, despite having an oversupply of 32 GW for 25 GW demand, and highlighted risks to Spain's export and manufacturing sectors.  

In 2025, renewables are expected to comprise 42% of Europe's energy mix, with coal usage drastically reduced by 92% by 2030, driven by coal plant retirements. 

Mainland China and India continue to rely heavily on coal, with coal projected to make up 57% of their power generation in 2025, despite global shifts towards renewable energy. 

While coal contracts, renewables continue to expand. Mainland China produces approximately 80% of the world's solar panels, with Tongwei Solar holding a 15% market share, underscoring China's pivotal role in the global solar industry. 

Green hydrogen production is expected to significantly influence Europe's future energy demand, with the transport sector's energy demand forecasted to increase by 638% by 2050. 

Mainland China's approach to carbon commitments and energy supply security will significantly impact global energy policies and climate goals, with potential shifts in global energy supply chains if mainland China remains carbon-intensive.  

What role do renewables play in Europe's energy mix?

Power outages in Spain in April 2025 have put a spotlight on the reliability of renewable energy, although enough capacity was available at the time of the outage. Events like these show that Europe has work to do to align the generation of renewable and conventional energy. 

In Europe, renewables are forecast to make up 42% of the power supply in 2025, according to S&P Global Commodity Insights data. Coal makes up 11% of the energy mix in Europe. This will be reduced by 92% in 2030, according to Commodity Insights forecasts, driven by coal plant retirements.   

While coal consumption in Europe is declining, the continent’s other preferred fossil fuel—natural gas—will stay in use for several years, according to Commodity Insights. 

Following the Russian invasion of Ukraine in 2022, Europe’s gas supply chain was adjusted. Norway and the UK now supply the majority of Europe’s gas needs from within the continent while the US supplements this capacity, especially via LNG. Installed gas capacity will peak at 230 GW in 2039. This translates to a 53% increase compared to the current installed capacity, which shows a commitment to a continued investment into the fossil fuel.

Where do we see continued reliance on coal?

While Europe works to reduce its reliance on fossil fuels, countries in Asia such as mainland China and India actively commit to building new coal plants—for now.

The coal trade is divided into two parts: thermal—coal used for electricity—and metallurgical—coal used for the production of steel. Thermal coal imports make up the higher share of these two, with mainland China importing 41% of global thermal coal in 2024, followed by India, and Japan, according to Commodity Insights data.

In mainland China and India, coal is forecast to make up 57% of power generation in 2025, followed by hydro power, solar power, and onshore wind. Coal usage will peak in 2029 and then reduce by 4% in 2030 compared to 2025.

Looking at data from the past five years, India and mainland China increased their total coal imports from main partners Australia, Russia and Indonesia by 11% and 185% respectively, compared to 2020.

In March 2025, Indonesia introduced a domestic reference price, which was used to determine average coal product prices and royalty payments for exports. This measure, together with both India and mainland China sitting on decent stockpiles at power plant and port levels, will reduce Indonesia’s coal exports this year.?Year over year, Indonesia’s coal exports declined by 11% comparing April 2024 to April 2025.

Indonesia's own coal consumption will decrease by 52% comparing 2025 to 2050, with the focus for energy production shifting towards renewables, such as solar. The latter is shown by Indonesia’s photovoltaic cell and panel imports value, growing 164% comparing 2023 to 2024, according to Market Intelligence data.

Who are the main exporters of solar power equipment?

Coal’s demise is propelled by renewables’ rise, although the sector is not without its challenges. What appears to be Europe’s decarbonization success can also be seen as a dependency on coal-powered Chinese manufacturing. 

The global expansion of installing renewable energy resulted in global trade in solar panels that is projected to increase by 80% between 2025 and 2040 in real value terms according to Market Intelligence estimates.  

Mainland China dominates global solar panel manufacturing, producing around 80% of the world's solar panels. In 2024, the main importers were the Netherlands, India, Brazil, Pakistan, Saudi Arabia, and Spain.

While India has been increasing its own solar module production, imports remain substantial. Mainland China and Vietnam are the primary suppliers, with mainland China holding a significant 78% share of the market.

Who are the main exporters of wind power equipment?

As for wind-powered electric generators, the main exporters in 2024 were Germany and Denmark with a combined export value of US$ 4.1 billion. Both mainland China and India also hold a significant share in world wind-powered electric generators production and trade, representing 18% and 3% of exports respectively.

The demand side for power generation in Europe is also influenced by the generation of renewable fuels. In 2025, commercial and industrial needs are forecast to take up the majority of energy usage, but the main influence for demand in future will be the generation of green hydrogen, with a forecasted demand of 909TWh in 2050, according to Commodity Insights.

This increase in demand is driven by the transport sector, where rail as well as trucks, and ships, are planned to run on hydrogen and electricity, with various fleets choosing a hybrid between the two. This electrification is expected to increase the transport sector’s energy demand by 638% in 2050 compared to 2025.

Major manufacturing countries of solar and windfarm equipment, such as mainland China, Germany, and Denmark are also among the countries heavily investing in its use, thereby securing access to equipment in future.

How is mainland China influencing the renewables market?

In 2020, mainland China pledged carbon neutrality by 2060 and reaffirmed its 2030 carbon peak target. By 2023, it led global renewables growth, cut coal’s energy share by four points, and became the top LNG importer. While it drove two-thirds of global oil demand growth over the past decade, this is set to slow as its economy transitions and road transport decarbonizes.

How mainland China navigates its carbon commitments while ensuring economic stability and energy supply security, will significantly shape the development of its energy sector and have implications for the global market. Therefore, its decisions on coal, and other fossil fuels, directly affect energy policies and prices.  

This also affects global supply chains and trade patterns. If mainland China remains carbon-intensive while other countries tighten regulations, manufacturers might relocate there, undermining global climate efforts.

Countries such as Vietnam or Malaysia, which position themselves as manufacturing reshoring hubs, continue to import equipment, leaving potential to increase their share of decarbonization equipment on their manufacturing lines.