--- title: "US Set to Outspend China on Fossil-Fuel Power for First Time in Decades, IEA Says" description: "The United States is on course to invest more than China in coal- and gas-fired power in 2026, the first such reversal in decades, according to the International Energy Agency. The driver is the scramble to power AI data centers, even as China keeps spending far more on clean energy." category: "Economy" category_url: https://boursel.com/category/economy author: "Rafael Ortiz" published: 2026-07-05T01:37:08.000Z updated: 2026-07-05T01:37:08.000Z canonical: https://boursel.com/article/us-set-to-outspend-china-on-fossil-fuel-power-for-first-time-in-decades-iea-says tags: ["energy", "fossil-fuels", "china", "artificial-intelligence", "electricity"] --- # US Set to Outspend China on Fossil-Fuel Power for First Time in Decades, IEA Says The United States is on course to invest more than China in coal- and gas-fired power in 2026, the first such reversal in decades, according to the International Energy Agency. The driver is the scramble to power AI data centers, even as China keeps spending far more on clean energy. For the first time in decades, the United States is set to spend more than China on new fossil-fueled power plants. The International Energy Agency expects US investment in coal- and gas-fired power to overtake China's in 2026, [Carbon Brief reported](https://www.carbonbrief.org/ai-boom-means-us-is-now-investing-more-in-fossil-fuel-power-than-china/), citing the agency's latest world energy investment report. It is a notable turn: for years China, as it industrialized, was the world's dominant builder of thermal power. ## What is driving the American surge The reason is artificial intelligence, or more precisely the electricity it consumes. Data centers that train and run large AI models draw enormous, round-the-clock power, and rather than wait in line for grid connections, technology companies are increasingly building their own gas-fired plants next to the data centers, [Carbon Brief reported](https://www.carbonbrief.org/ai-boom-means-us-is-now-investing-more-in-fossil-fuel-power-than-china/). That rush has pushed up demand for gas turbines, and their prices have been climbing as orders outpace what manufacturers can deliver. US policy has reinforced the tilt toward gas. The Trump administration has rolled back federal support for renewables, weakening the economics of new solar and wind relative to gas at exactly the moment power demand is rising. The result is that a growing share of new US electricity supply is being met with fossil gas rather than clean sources. ## China is pulling back on fossil power, not on energy China's side of the crossover is not a story of spending less on energy. It is spending less specifically on coal and gas power, while continuing to pour money into renewables. The IEA expects Chinese fossil-fuel power investment to fall, partly because of domestic policy choices and partly because higher global gas prices, pushed up by conflict in the Middle East, have made gas generation less attractive, [Carbon Brief reported](https://www.carbonbrief.org/ai-boom-means-us-is-now-investing-more-in-fossil-fuel-power-than-china/). By almost any measure, China remains the world's largest clean-energy investor, having spent on the order of $625 billion on clean energy in 2024, [according to the IEA](https://www.iea.org/reports/world-energy-investment-2025/executive-summary). Chinese wind and solar additions again ran at record levels through 2025, [Carbon Brief has reported separately](https://www.carbonbrief.org/analysis-clean-energy-drove-more-than-a-third-of-chinas-gdp-growth-in-2025/). So the crossover reflects two different bets: the US leaning on gas to feed an AI build-out, and China leaning harder into renewables. ## Why it matters For energy markets, sustained US gas-plant construction points to firm domestic demand for natural gas and for the equipment, turbines and pipelines that go with it, a tailwind for American energy and industrial suppliers. For emissions, the picture is mixed: new US gas and coal capacity can lock in fossil generation for decades, while China's renewable build-out displaces far more. It is worth keeping the reversal in proportion. This is a shift in who is spending more on fossil power, not a wholesale reversal of the global move toward clean energy, which China's spending still dominates. But it is a real marker of how the AI boom is reshaping the energy map, turning the United States, for now, back toward the fuels much of the world is trying to leave behind. ## Sources - [AI boom means US is now 'investing more' in fossil-fuel power than China](https://www.carbonbrief.org/ai-boom-means-us-is-now-investing-more-in-fossil-fuel-power-than-china/) - [World Energy Investment 2025 — Executive Summary](https://www.iea.org/reports/world-energy-investment-2025/executive-summary)