Coal-fired power could remain part of the United States’ energy mix for longer than previously anticipated. Rapid growth in electricity demand is forcing utilities and policymakers to prioritize reliability over retirement schedules.
“Coal is, quite simply, America’s largest energy asset,” Peabody Energy Corporation (NYSE:BTU) CEO James Grech said at the company’s latest earnings call.
“More than that, America has more energy in its coal than any nation has in any one energy source,” he added.
Grech, who was recently appointed to chair the reconstituted National Coal Council, said it would be “irresponsible to not use this unique asset for the benefit of the American people”. From his viewpoint, coal offers strategic value because it is abundant, domestically available, and capable of supporting long-term energy security.
AI’s Growing Needs
Electricity consumption is rising sharply, particularly as artificial intelligence, data centers, and advanced manufacturing expand across the country. BloombergNEF estimates that U.S. data centers alone could consume up to 106 GW of power by 2035, compared with about 35 GW in 2024.
Utilities are increasingly citing these new loads as a reason to keep coal plants running. According to Yale, Southern Company chief executive Chris Womack recently said the utility would extend coal plants “as long as we can because we need those resources on the grid”. Analysts say at least 15 coal plants have already had planned retirements delayed, some indefinitely.
Cheaper Capacity At Disposal
Peabody CCO Malcom Roberts pointed out that coal generation rose around 13% year-over-year – more than expected – but that there is more room to expand.
Existing coal plants ran at 42% of capacity in 2024 versus 72% at historical high levels, he clarified.
Extending the life of existing plants could significantly increase electricity supply without the delays associated with new infrastructure. Raising utilization could add up to 10% of total U.S. power generation compared with 2024 levels.
“Renewables continue to be built out, but don’t solve the problem of data centres and factories that need 24/7 generation,” Roberts said. He added that gas plants face development backlogs and nuclear projects involve long permitting and construction timelines. Meanwhile, he cited research showing that adding new solar capacity could cost 10 times as much.
A similar trend is emerging overseas. In Australia, the planned closure of the country’s largest coal-fired power station, Eraring, has been delayed from 2027 to 2029. Experts said that the grid was not ready and blackouts were possible.
Despite the renewed role for coal, longer-term forecasts still point to gradual declines. The International Energy Agency expects global coal demand for power generation to plateau and then ease slightly through to 2030.
BTU Price Action: Peabody Energy shares were up 0.48% at $38.01 during premarket trading on Tuesday. The stock is approaching its 52-week high of $39.95, according to Benzinga Pro data.
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