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By Frank Clemente and Fred Palmer; Coal is the Cornerstone, LLC.
Frank Clemente
Fred Palmer December 21, 2025 - The United States has cavalierly closed over 300 coal plants in the last decade with nary a thought as to the implications for reliability and affordability. Flat electricity demand for years has enabled the US grid to dance through the raindrops, but that benign era is coming to a rapid end. With the rise of Artificial Intelligence and its associated data centers, in conjunction with re-industrialization, air conditioners, heat pumps, electrolyzers, cryptocurrency, electric vehicles, etcetera and etcetera, the Department of Energy projects power generation to increase from about 4,175 Terawatt Hours (TWh) in 2025 to over 5,600 TWh in 2044. This rise of over 1,400 TWh in the next 20 years is more than six times the growth in power generation over the 20-year period 2004 to 2023.To give a further idea of scale, this increase alone exceeds the current electricity generation of Germany, France and the UK combined.
Where will the US get the energy required to meet this dramatic increase in electricity demand over the next two decades? The US has already dug itself into a hole by reducing coal’s generation from a national role of 45% to 16%. The underlying reasons for this closure of plants have been aggressive and well-funded political activism, overzealous policy makers and ill-conceived Renewable Portfolio Standards. As a result, the US is steadily developing an electric power system that will be increasingly expensive, less reliable and a risk to national security. Don’t believe that? Look at the consequences of Europe’s self- flagellation.
Closing coal plants has not only had a significantly negative impact on the daily lives of many millions in the European Union but has also put their socio-economic future in jeopardy. Yet, despite these lessons from across the Atlantic, the United States seems hell bent on following the path Bjorn Lomberg called “Europe’s Economic Suicide Pact” and the Wall Street Journal’s conclusion that the rush to so called green energy “Crippled the Economy”. The European Central Bank succinctly described the problem: “High energy costs threaten the competitiveness of European firms and weigh on employment … the loss of one position in an energy-intensive firm can cause the loss of up to five additional jobs elsewhere”.
Since 2015 coal-based electricity in the EU has declined from 705 terawatt hours (TWH) to 265 TWH - a drop of over 60 percent. At the same time, the impact on the people who live in the region has been severe. Germany now has electricity costs among the highest in the world. In Italy, the cost of electricity to families has increased 110% and in the UK 95%. Industrial and commercial rates have increased in parallel causing an acceleration in deindustrialization, declines in manufacturing, migration of industry, job losses and the always attendant social problems and economic pain.
Take Germany, for example, where high electricity costs are driving the outmigration of industries like automotive and chemical--- established hallmarks of German manufacturing. Just last week for example, Volkswagen announced it will stop manufacturing vehicles at its site in Dresden, marking the first time in the carmaker’s 88-year history that it will close production in Germany. The Dresden plant opened in 1937.
And the Chemical Industry is on the ropes. The European Chemical Industry Council warned that energy costs have become the defining issue on whether a plant stays open in the EU. As of 2025, 40% of the Union’s ethylene crackers face closure and major international chemical companies are shutting down their European assets. Dow plans to close an ethylene cracker in Böhlen as well as chlor-alkali and vinyl facilities in Schkopa. A siloxanes plant is being shut by Dow in Barry, UK and at least three chemical firms are closing in Italy and Belgium within the year.
Artificial intelligence will be the watchword of the next generation’s economic advance and Europe has already dug itself into a hole from which it will be hard to escape. Data centers require reliable electricity at an affordable price. The EU can promise to provide neither over the next 20 years. The question for Americans is: “Can the US accommodate significant growth in AI going forward”? We have the lead now. But our power is growing increasingly unreliable and more expensive as the coal fleet continues to be diminished by the same mindset that is causing so much socio-economic decline in Europe.
But, not to worry. China and India ‘will be keeping the lights on” for power dependent data centers and electricity intensive manufacturers with large employment multiplier impacts. China now has the world’s largest power grid and it’s anchored by coal. Between 2010 and 2024, China power production increased by more than the rest of the world combined. Last year, China generated more than twice as much electricity as the U.S. Chinese data centers are now paying less than half what American centers pay for electricity and the reliability of coal-based electricity is legendary. Coal power shows up when needed – the sine qua non of Artificial Intelligence.
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Frank Clemente PhD. specializes in research on the socioeconomic impact of energy policy and is the author of The Global Value of Coal, published by the International Energy Agency (2012). Professor Clemente has served on the faculty of the University of Kentucky, University of Wisconsin and Penn State. He has extensive experience in speaking, writing and presenting data on the value of coal to the United States and the world. All opinions expressed here are presented independently from any university with which he has been affiliated.
Fred Palmer Esq. served as CEO of Western Fuels before he joined Peabody Energy as Senior Vice President for Government Affairs. Palmer was Chair of the World Coal Association Board and a member of the National Coal Council. He received the American Institute of Mining, Metallurgical and Petroleum Engineers Award for “Distinguished Achievement in Coal Technology”. He also received a Statement of Appreciation from the National Coal Council in 2015 with a plaque for “Guidance since 1990”
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