The price of electricity is a big factor in determining who can go farthest, fastest.
Which sort of sucks.
From CoalZoom,
September 7, 2025 - In June, Rand Corporation researchers stated: “China wants to become the global leader in Artificial Intelligence by 2030”. Given events of the past 25 years, does anyone think this is an unreasonable goal? Decades ago, the world was caught flat footed by the rapidity with which China was able to utilize coal-based electricity to jump forward. In the 2000 World Energy Outlook, the IEA projected coal generating capacity would increase from the then current 212 GW to 499 GW in 2020. By 2020, however, China’s actual coal capacity was over 1,000 GW. Similarly, in 2000, the IEA projected China’s coal generation would increase from 990 TWh to 2,600 TWh in 2020. But, by 2020, generation from coal exceeded 4,800 TWh and was well on its way toward 6,000 TWh.
China plays the long game in energy. In successive Five-Year Plans, Beijing focused on strategic investments in renewable technologies as well as the critical minerals to support them. The PRC now dominates almost every part of the renewable supply chain whether it is solar PV modules, wind turbines, or batteries, usually enjoying a market share of more than 65%. The IEA Critical Minerals Report found that “China is the dominant refiner for 19 of the 20 minerals analyzed, holding an average market share of around 70%.” Robert Bryce also documented the issue, warning China has a chokehold on about three dozen key elements in the Periodic Table, “with an average market share of around 70%”. China uses its dominance in global critical minerals supply chains for strategic ends, and just last December banned exports to the US of gallium, germanium, and antimony.
Now, China has set its sights on dominating Artificial Intelligence. As Daniel Hook, CEO at Digital Science stated: “AI is no longer neutral – governments are using it as a strategic asset, akin to energy or military capability…and China is outstripping the rest of the world in research.”
A Tale of Two Countries
The United States also aspires to preeminence in Artificial Intelligence. President Trump has stated: “It is the policy of the United States to sustain and enhance America’s global AI dominance”. Secretary of Energy Chris Wright added that “American energy dominance “ is a prerequisite for achieving and maintaining AI dominance. Finally, NVIDIA CEO Jensen Huang recently made it clear: "Remember one big idea, every single data center in the future will be power limited”
In essence, the progress of AI and its associated data centers depends upon reliable and affordable electricity. The US is on the fast track to providing neither at scale. China, on the other hand, has developed a baseload generation system anchored by coal, the personification of reliability and affordability in the world of electricity.
Electrons follow the laws of quantum physics, not political rhetoric, and the simple fact of the matter is that the availability of reliable electricity is the ultimate restraint on AI. Rather than build a solid foundation for societal electrification, America has steadily eroded its most important source of baseload capacity—coal. Instead, the US is greatly expanding dependence on intermittent, unreliable and expensive wind and solar, whose production is limited by the immediate availability of the resource, thus greatly limiting their relevance to data center requirements of 24/7 electricity.
Consider these data: In 2015, baseload generation from coal, nuclear and natural gas provided about 80% of US electricity while wind and solar only produced near 6%, But with the continuing closure of hundreds of coal plants, the DOE projects the baseload fuels will only comprise 46% of power in 2035. Meanwhile, wind and solar generation is also forecasted to comprise 46%. In other words, almost half of US electricity will be dependent on intermittent, non-dispatchable, expensive sources of generation. The implications for data centers are enormous when the US is bracing for what the DOE called “unprecedented demand for electricity”. The US is treading a risky road indeed.
Meanwhile, China, America’s leading competitor in the AI race is building an extensive power generation system anchored by environmentally advanced coal power plants putting to rest the myth that there “is no such thing as clean coal”. As Clare Richardson of the National Bureau of Asian Research points out: “China is rapidly is deploying ultra-supercritical and supercritical coal technology, which can operate at higher temperatures and pressures to improve thermal efficiency”
China is preparing to be the global leader in energy for the rest of this Century. Coal currently provides over 60% of its electricity and China is assiduously expanding its coal fleet. Consider these data relating to coal’s role in their Energy Master plan:
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