China’s coal sector must restructure and upgrade in response to falling demand, the vice-president of the nation’s coal trade body has said.

Jiang Zhimin of the China National Coal Association (CNCA) told the Xinhua state news service that demand for coal is set to slow between now and 2020, during the period of the 13th five-year plan.

He pointed to the government’s drive to replace coal-fired power plants with gas-fired and renewable power as a key factor contributing to the decrease in demand. And he said the coal industry should respond with restructuring and upgrading measures including building larger power plants, eliminating excess production capacity and developing more downstream activities.

In good news for the coal sector, Zhimin said that coal still tops the list of energy sources in China, and that increasing demand for power due to ongoing urbanization, industrialization and agricultural modernization would continue to support growth.

However, Yuan Jiahai, a professor at the North China Electric Power University, said in November that expected production cuts by industry due to the economic slowdown could mean a severe oversupply of coal-fired power.

China’s installed coal-fired power capacity is predicted to hit 1016 GW by 2018 and 1367 GW by 2025.