According to the Shanxi government work report this year, overcapacity of coal production was cut by 30.9 million tons last year. Over the past three years, the province has reduced overcapacity by a total of 88.4 million tons.

While coal production has fallen, optimization of the coal industry has risen, with more than 20 coal-based industrial parks established in Shanxi in recent years.

"Clean and renewable energy plays a leading role in meeting China's growing demand for energy," said Han Wenke, director of the Energy Research Institute at the National Development and Reform Commission.

"Green production and efficient use of coal will facilitate the country's industrial upgrade for overall green economic growth."

Han said China will see a drastic decline in coal consumption after 2020. Coal is expected to make up less than 50 percent of total energy consumption in 2030, and 30 percent in 2050.

Han Dong'e, a researcher at the Shanxi Academy of Social Sciences, said in recent years the province had been reducing its dependency on coal.

"Shanxi is the energy base of China with the country's second largest coal production capacity, which has powered national economic growth, but also brought the structural problem of being over dependent on coal," Han said.

"Shanxi has been very clear with its goal to lower its annual production of coal to 1 billion tons by 2020."

Han said under the targets, the main objective will be to increase the supply of high-quality coal.

While optimizing its traditional coal sector, Shanxi is also vowing to turn itself into a high-end manufacturing base.

According to the provincial statistics bureau, last year Shanxi's GDP hit 1.68 trillion yuan, up 6.7 percent year-on-year. Among the industries with yearly revenue over 20 million yuan, the coal industry saw only a 0.3 percent growth while the manufacturing sector went up 9.2 percent.

Overall, the manufacturing sector contributed 76.4 percent of Shanxi's industrial growth.

Early this year, the provincial department of industry and information technology said Shanxi will accelerate the development of industries, including railway transportation, new energy vehicles, biopharmaceuticals and modern coal industries.

According to the department's 2019 action plan, the province will build an industrial park and clusters for emerging industries. This includes turning Taiyuan and Datong into transportation equipment manufacturing hubs, and Taiyuan, Datong, Changzhi and Yuncheng into automobile manufacturing bases.