Coal-fired power is the main power source and the biggest contributor to energy conservation in the past several decades in China. It is generally believed that advanced technology should be counted on for energy conservation. However, a review of the decline in the national average net coal consumption rate (NCCR) of China’s coal-fired power industry along with its development over the past few decades indicates that the up-gradation of the national unit capacity structure (including installing advanced production and phasing out backward production) plays a more important role. A quantitative study on the effect of the unit capacity structure up-gradation on the decline in the national average NCCR suggests that phasing out backward production is the leading factor for the decline in the NCCR in the past decade, followed by the new installation, whose sum contributes to approximately 80% of the decline in the national average NCCR. The new installation has an effective affecting period of about 8 years, during which it would gradually decline from a relatively high value. Since the effect of phasing out backward production may remain at a certain degree given a continual action of phasing out backward capacity, it is suggested that the organized action of phasing out backward production should be insisted on.