Saving Coal to Save Economies in the Era of Artificial Intelligence and Data Centers

Guest Post from the Institute for Energy Research.

President Trump wrote in a social media post, “I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL.”

He is looking to counter China’s massive coal-generating fleet and its economic advantage in using cheap coal to process critical elements and to manufacture “green technologies,” which are required by Western nations deep into the green energy transition to keep their commitments to the UN Paris Accord.

His post aligns with his declared national energy emergency, the need for more power supply to meet growing demand from artificial intelligence (AI) data centers, and the general trend toward electrification.

Trump’s National Energy Dominance Council supports those views. Interior Secretary Doug Burgum wants to restart coal plants that were shuttered due to regulations from the Obama and Biden administrations. Secretary of Energy Chris Wright has advocated for stopping the closure of coal-fired power plants as part of his and the president’s “all-of-the-above” approach to increasing energy production.

Environmental Protection Agency (EPA) Administrator Lee Zeldin’s agenda includes reviewing and essentially reversing Biden’s Power Plant Rule that shuts down existing coal-fired plants unless they add technology that is commercially unavailable, as well as other rules affecting coal-fired power plants.

Background

At the beginning of the century, coal generated more than half of U.S. power, but onerous regulation, massive subsidies for intermittent wind and solar power, and competition from natural gas has lowered its share to 16%, according to the Energy Information Administration, despite the United States having the largest coal resources in the world.

Coal’s reduction was in keeping with the Obama and Biden administrations’ net-zero transition and commitment to the Paris accord. Those commitments have resulted in the ongoing deindustrialization of economic powerhouses in Europe, and more residents in those countries in energy poverty as intermittent wind and solar power have raised energy costs due to their need for expensive backup power.

Whether that power comes from gas plants forced to operate inefficiently at half their capability or storage batteries, it is a redundant cost made necessary by inherently intermittent renewable energy sources, which leads to increased energy prices and forces industries to move to more friendly energy-cost locations.

The remaining U.S. coal fleet has also been encumbered with low capacity factors of around 40% when they could perform more efficiently at twice that level if allowed to continue operating. Those plants should be used more intensively.

Electric utilities are already canceling planned coal plant retirements across the country, including in Georgia, Indiana, Utah, and Wyoming. For example, in its latest integrated resource plan, Southern Company subsidiary Georgia Power forecasts that demand will go up by 8,200 megawatts by the winter of 2030-31.

This is more than three times the output of the new nuclear reactors at Plant Vogtle, the first new nuclear reactors in the United States in decades. To meet that growth, the company is requesting a range of resources that include extending the life of coal plants slated for retirement.

State Legislation

States are also seeing the need to keep baseload coal plants on the grid. Since 2021, several states have enacted legislation establishing a preference for the continued operation of coal-fired power plants over developing other energy resources.

The policies include subsidies for the retention of coal-fired facilities and new standards maintained by public service commissions (PSCs) that encourage increased investment in existing resources rather than retiring them. At times, subsidies for fossil fuel plants may be necessary to offset the enormous subsidies and mandates given to intermittent sources, which are attractive to utilities. As of February 2025, Arkansas, Wyoming, West Virginia, Kentucky, Nebraska, and Utah passed laws to protect existing power generation.

Five of those states, Arkansas, West Virginia, Wyoming, Kentucky, and Nebraska, have not established targets for renewable resource development, so the legislation that they have enacted does not run counter to their other policy goals. Utah, however, requires utilities to pursue renewable energy when it is cost-effective.

The material below provides specifics of legislation from those six states that is taken from the American Action Forum’s Coal in the Generation Mix – State-level Policies, dated March 13, 2025:

In 2021, Arkansas passed the Affordable Energy Act that requires the state’s PSC to evaluate the remaining useful life of an existing electric generation unit and complete a cost-benefit analysis, a rate impact analysis, and a reliability and resilience analysis every three years. The PSC must explicitly state whether a life extension of each unit is in the public interest. In April 2023, Arkansas amended its Affordable Energy Act to mandate that the Arkansas PSC produce a report reviewing the remaining useful lives of existing electric generation units with a planned retirement date.

In 2021, Wyoming established similar legislation against facility retirements. In order to retire facilities, utilities must demonstrate that the retirement will result in cost savings and will not result in an “insufficient amount of reliable and dispatchable capacity.” The PSC must determine that the retirement would not result in a shortage of electricity, nor would it “adversely impact” the dispatchability of electricity in the state.

The legislation also prevents utilities from “recovery of or earnings on the capital costs associated with electric generation facilities built, in whole or in part, to replace the electricity generated from a retired coal or natural gas electric generation facility that was retired on or after July 1, 2021, and for which the presumption against retirement was not rebutted.”

In 2023, Wyoming passed the coal-fired facility closures litigation-funding amendments that allow the governor to use dedicated funding to litigate against entities that “impermissibly impede Wyoming’s ability to export coal, that cause the early retirement of coal-fired electric generation facilities located in Wyoming, that result in the decreased use of Wyoming coal or the closure of coal-fired electric generation facilities that use Wyoming coal.”

In 2021, West Virginia passed legislation aimed at maintaining employment in the coal mining industry, stating, “It is imperative the State of West Virginia take immediate steps to reverse these undesirable trends to ensure that no more coal-fired plants close, no additional jobs are lost, and long-term state prosperity is maintained….

Public electric utilities in West Virginia should be encouraged to operate their coal-fired plants at maximum reasonable output and for the duration of the life of the plants.” In February 2023, West Virginia passed legislation that mandates an existing power plant obtain approval from the West Virginia Public Energy Authority before undertaking any decommissioning or deconstructing activities.

In March 2023, Kentucky passed legislation requiring utilities to obtain approval from the PSC to retire fossil fuel-generating units. The legislation required a utility to submit sufficient evidence to demonstrate that the retired capacity will be replaced by reliable new electric generating capacity and that the retirement will not cause the utility’s ratepayers to incur higher costs.

Additionally, the decision to retire a plant cannot be “the result of any financial incentives or benefits offered by any federal agency.” In April 2024, state lawmakers overrode the governor’s veto of a bill that created additional barriers for utilities to retire fossil fuel power plants. The legislation created a new commission to review any requests to retire a fossil fuel-fired plant before the PSC makes a decision.

Moreover, a utility cannot retire a plant until after “the replacement generating capacity is fully constructed, permitted, and in operation” unless the utility can demonstrate the necessity to retire the plant earlier.

In April 2024, Nebraska passed legislation that requires a utility to provide a written notice to the Nebraska Power Review Board before making a final decision to close or decommission a power plant. The written notice must include information on transition activities, including worker training and education services, and promoting economic development in the affected communities.

In March 2024, Utah passed legislation that provides the state the option to “purchase an electrical generation facility intended for decommissioning” for “fair market value,” which is determined by the new authority created under the bill, a “Decommissioned Asset Disposition Authority” within the Office of Energy Development.

Conclusion

Electricity demand is soaring due to data centers for AI and cryptocurrency, and increased electrification spearheaded by the Biden administration.

Because of that demand and the unreliability of the electric grid due to the addition of intermittent wind and solar plants that cannot operate 24/7, President Trump called for a national energy emergency, and his National Energy Dominance Council is fast at work to improve both the supply of electricity and the reliability of the grid.

As part of that effort, Secretaries Burgum and Wright and EPA Administrator Zeldin deem it necessary to keep existing coal plants operating and to investigate whether this baseload source of generation can be expanded to meet the nation’s growing needs.

Utilities and states are also seeing that need. Six states, Arkansas, Wyoming, West Virginia, Kentucky, Nebraska, and Utah, have passed laws to protect existing power generation.

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