LNG is too expensive to replace coal in power generation. Coal-generated power is US$30-40 per megawatt-hour cheaper than natural gas, while onshore wind and solar are the cheapest power sources. China is relying on domestically produced resources for energy security and electricity reliability. Recent policies aim to control coal-to-gas switching while limiting LNG imports. LNG is not displacing China’s coal consumption even outside the power sector. Investments in coal-based iron and steelmaking capacity far exceed natural gas-based processes, and full decarbonization will require non-fossil fuel alternatives.
