In-depth analysis of the coal industry: policy analysis, pricing power, transformation directions, industrial chain, and in-depth review of related companies (produced by Huibo)

Huadian Engineering & Construction Co., Ltd. is a representative enterprise in the field of thermal power unit retrofitting. The company possesses capabilities in developing retrofit technical solutions, system integration, and engineering EPC (Engineering, Procurement, and Construction) services. It has delivered comprehensive EPC retrofit services to multiple power plants, including comprehensive energy efficiency enhancement for Units 1 and 2 at Kemen Power Plant and flexibility retrofitting for Units 1 and 2 at Tuyou Power Plant—projects focused on improving energy efficiency and operational flexibility. Beyond the three major host equipment manufacturers, Huadian Engineering & Construction has emerged as an outstanding implementer—and increasingly a key contractor—for thermal power unit retrofit projects. Additionally, the company is steadily advancing R&D and experimental platform construction for molten salt thermal energy storage. Integrating molten salt thermal energy storage systems into thermal power units represents a novel flexibility retrofit approach. By installing such systems, the traditionally rigid "boiler-turbine coupling" can be decoupled, thereby further unlocking deep peak-shaving capacity while ensuring safe and stable unit operation. In December 2024, the company independently designed and constructed a molten salt thermal energy storage test platform, officially commissioned at Huadian Henan. This platform is China’s first multi-scenario molten salt thermal energy storage test platform. 2. Transformation Direction Two: Extension of the Coal Chemical Industry Chain (1) Transition of Coal from Fuel to Feedstock The coal chemical industry constitutes one key direction for coal sector transformation, as well as a critical pathway toward cleaner, more efficient, low-carbon, and high-end development of coal utilization. Efforts should focus on shifting coal’s role from fuel to feedstock, thereby extending value along the coal industrial chain. (2) Policy Support In September 2024, the National Development and Reform Commission (NDRC) and other departments jointly issued the "Opinions on Strengthening Clean and Efficient Coal Utilization," proposing orderly development of coal feedstock applications, enhanced innovation in coal-based new materials, and integrated development of coal chemical industry with green electricity, green hydrogen, energy storage, and carbon capture, utilization, and storage (CCUS). In December 2024, the NDRC and other departments released the "Notice on Promoting Healthy Development of Modern Coal Chemical Industry," emphasizing intensified scientific and technological innovation and encouraging newly built modern coal chemical projects to undertake demonstration upgrades in technological innovation. (3) Steady Growth in Coal Consumption by the Chemical Industry Coal consumption by the chemical industry has maintained an upward trend over recent years, becoming a significant pillar of thermal coal demand—reflecting the positive momentum behind coal’s transition into a chemical feedstock. 3. Transformation Direction Three: Integrated Development of Coal and New Energy (1) New Energy Development in Coal Mining Areas In October 2025, the National Energy Administration (NEA) issued the "Guiding Opinions on Advancing Integrated Development of Coal and New Energy," explicitly proposing: — Accelerating the development of photovoltaic (PV) and wind power industries in mining areas, expediting PV station construction, promoting local consumption of new energy generation, and supplying more green electricity to mining areas; — Actively promoting clean energy substitution for mining area energy use, including replacing transport equipment with new-energy alternatives (e.g., electric or hydrogen-powered haul trucks), especially at open-pit coal mines where conditions permit large-scale deployment; — Steadily advancing renewable-energy-based heating and cooling systems in mining areas. (2) New Energy Development in Subsidence-Affected Areas Caused by Coal Mining The 15th Five-Year Plan supports ecological restoration and green development in ecologically degraded regions, promotes transformation of old industrial bases and resource-dependent areas, assists resource-exhausted cities in cultivating successor and alternative industries, and advances governance of coal-mining subsidence areas. Concrete pathways include utilizing spatial resources—such as land subsided due to coal mining—for PV and wind power development, thus achieving an organic integration of mine ecological restoration and new energy development.

National Energy Administration: Promoting Integrated Development of Coal-Fired Power and New Energy

Support self-owned coal-fired power units to reduce their minimum technical output through deep peak-shaving retrofits; while continuing to fulfill their supportive and regulatory functions, they should fully integrate with nearby new energy sources—freeing up generation capacity for bundled utilization of local new energy. Nearby new energy sources may connect either via the public grid or directly to self-owned coal-fired units, thereby substituting for the latter’s electricity generation and heat supply—meeting green energy requirements for key industries. Fusion projects are encouraged to achieve annual carbon emissions reductions of at least 5% compared to pre-fusion levels, with a target of over 10%. (V) Direct Connection of On-site or Nearby New Energy to Coal-Fired Power Plants’ Energy Systems for Green Self-Consumption Support distributed new energy installations within plant premises—or nearby new energy sources—to connect directly to coal-fired power plants’ internal energy systems, enabling new energy to directly participate in auxiliary power consumption and other internal energy-use processes, thereby enhancing the level of green energy substitution. Distributed new energy installations on-site should fully utilize available spatial resources—including coal storage yards, main plant buildings, administrative zones, and auxiliary facilities. III. Technical Requirements (VI) Intensify Energy-Saving and Carbon-Reduction Retrofits for Existing Coal-Fired Power Units Existing coal-fired units shall create space for new energy integration and utilization through measures including flexibility retrofits, installation of energy storage/thermal storage systems, upgrading of transmission systems, and constructing on-site or nearby new energy facilities. (VII) Clarify Grid-Connection Methods for Fusion Projects Fusion projects must establish clear physical and responsibility boundaries with the public grid and fairly bear associated costs. New energy components of fusion projects may connect either directly to on-site energy storage/thermal storage facilities, or to the plant’s internal distribution system or the first connection point of its outgoing transmission system—forming an integrated entity that shares outgoing transmission lines. As a general principle, the straight-line distance between the edge of the new energy project site and the coal-fired power plant site shall not exceed 100 kilometers. (VIII) Optimize Grid-Connection Line Design for Fusion Projects Systematically assess the grid-connection conditions of coal-fired power plants and corridor resources for new energy grid connections, optimize routing schemes, and minimize crossing or overlapping with existing grid lines. Where reinforcement of outgoing transmission lines is required, implementation shall follow current national and industry policies and standards. (IX) Clarify Metering Methods for Fusion Projects Fusion projects must support independent electricity metering for both coal-fired power and new energy components. Appropriate point-of-interconnection meters shall be installed to ensure clear metering boundaries and accurate measurement results. (X) Ensure Grid-Performance Compliance for Fusion Projects New energy components within fusion projects must be "observable, measurable, controllable, and regulatable." Both new energy and energy storage systems in fusion projects must comply with relevant technical standards and safety requirements. If connected to the coal-fired plant’s internal energy system, they must not impair the plant’s grid-performance characteristics. Transient (and static) stability, short-circuit current levels, and power quality after grid connection must all meet relevant power system safety and stability standards. (XI) Encourage R&D and Application of Key Technologies Strengthen R&D in areas including energy storage/thermal storage technologies, wide-temperature-range molten salts and other thermal storage media, ultra-(extra-)high-temperature heat pumps, electric heating equipment, and collaborative operation platforms. Support full-chain innovation involving research institutions, universities, enterprises, and end-users to accelerate technology maturation and application. (XII) Accelerate Standard System Development Establish and improve standard systems covering planning, design, commissioning acceptance, and operational management of coal-fired power–new energy fusion projects. Enhance standards governing coordinated operation and participation in electricity markets, green certificate markets, and carbon markets. Develop standardized methodologies for carbon emission accounting specific to coal-fired power–new energy fusion projects.

National Energy Administration Promotes Coal and New Energy Integration with Five Models

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China's National Energy Administration issued guidelines to integrate coal power with new energy through five scenarios, offering subsidies and statistical exemptions. This initiative addresses grid stability challenges as solar capacity historically surpasses coal power installations.

caixin

2026-10-22

National Energy Administration Promotes Coal and New Energy Integration with Five Models

National Energy Administration Promotes Coal and New Energy Integration with Five Models

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