Under the dual carbon targets, despite the continuous emergence of new energy sources, coal power remains the primary source of electricity in China. The transformation and upgrade of coal-fired power units towards green development is a challenging task. However, the transformation of coal power units in China faces numerous difficulties. As a cutting-edge tool for supporting the green and low-carbon transformation of high-carbon industries, transition finance plays a crucial role in empowering the low-carbon transformation of the coal power industry. This paper examines the current development status, industry challenges, and policy support paths for the green and low-carbon transformation of Chinas coal power industry from the perspective of innovation in transition finance. The research finds that the pressure on carbon reduction in Chinas coal power industry remains significant, with a substantial funding gap for the industrys low-carbon transformation. Enterprises generally face losses, and the stability of the industrys low-carbon transformation is affected. The paper suggests that it is urgent to establish a transition finance framework and standards tailored for the coal power industry, optimize the incentive and constraint mechanisms of transition finance for coal power enterprises undergoing transformation, and accelerate the innovation of transition finance products and their implementation.
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