Key Trends to Monitor as the US Seeks to Revitalize the Coal Industry

 

 

October 2, 2025 - The Trump administration's promises of federal land leases and loans for the power sector may lead to a temporary and uneven improvement in coal's situation. However, other factors will influence whether the U.S. coal sector can achieve a lasting recovery.

Competition from alternative energy sources, the shipping costs of transporting coal from new mines to existing plants, and ongoing resistance to increasing emissions could hinder coal's resurgence, despite the federal commitments.

Key trends in coal output, emissions, and consumption will provide insight into the effectiveness of the latest initiatives to reverse coal's long-term decline in the U.S.

Capacity Trajectory

The most significant indicator of potential coal usage is the available power generation capacity.

Coal is currently the third-largest electricity source in the U.S., following natural gas and nuclear, but its share has decreased to the extent that a quick return to previous levels is unlikely.

From 2010 to 2024, U.S. coal plant electricity generation capacity fell by 43%, equating to 145 gigawatts (GW), according to data from Ember.

The remaining coal-fired capacity of approximately 194 GW is the lowest since at least 2000, significantly reducing coal's overall electricity generation potential compared to a decade earlier.

For coal to have any substantial long-term recovery prospects in the U.S., a lot more coal-burning generation capacity needs to be developed.

Currently, only 0.4 GW of new coal-fired capacity is in the planning stages, as reported by Global Energy Monitor.

Once completed, this new capacity would only increase the total coal-fired capacity by 0.2%, meaning it would have little effect on the total amount of coal burned for electricity.

Significant new capacity, in the tens of gigawatts, would be required to enhance coal's position in the U.S. energy mix.

Power Share

While the total capacity of coal has steadily decreased in recent decades, its share of the U.S. electricity generation mix has fluctuated and recently experienced a resurgence.

From January to August 2025, coal-fired plants produced about 16.3% of U.S. utility-supplied electricity, compared to a record low of 14.7% during the same period the previous year. This rebound has encouraged coal supporters, who hope for a sustained recovery in coal usage.

However, several factors that benefited coal's usage early in 2025 may change its attractiveness in the U.S. power mix in the future.

One major factor contributing to coal's resurgence was a spike in natural gas prices, prompting utilities to cut costs and increase coal usage due to its lower price.

In the first half of 2025, coal prices were around $1.15 per megawatt hour cheaper than natural gas, incentivizing generators to reduce gas output and increase coal usage.

Since June, though, coal prices have risen slightly above gas prices, changing power companies' consumption patterns and causing coal to lose ground to gas.

For coal to maintain sustained usage compared to other fossil fuels, it must continue to hold a significant cost advantage over gas, encouraging power firms to favor coal.

Achieving a lasting price advantage may be challenging due to the higher logistics costs associated with transporting coal from remote mines to distant power plants, often requiring trucks and trains.

Renewables Rising

Coal has also seen a reduction in its power generation share due to the rise of renewable energy sources, particularly in the past five years, as output from solar and wind farms has reached record levels.

Utilities have added more capacity from solar and wind than from any other energy source over the past decade, driven by substantial government subsidies that have made renewable energy cheaper than additional fossil fuel capacity.

In the future, while many of the renewable subsidies will be reduced, utilities are expected to continue prioritizing solar capacity due to the rapid deployment of solar energy onto grids.

Additionally, utilities are likely to focus on increasing battery storage capabilities, which can maximize the use of existing solar resources and enhance revenues in power markets.

Pollution Opposition

The significantly higher emissions from coal compared to other fuels are another reason coal's usage is unlikely to expand rapidly.

Coal-fired plants represent about 40% of total U.S. power sector emissions while generating less than 20% of the country's electricity, according to Ember.

Coal plants emit around 950,000 metric tons of CO2 per terawatt hour of electricity produced, compared to about 550,000 tons from natural gas plants.