July 2, 2026 - The United States is expected to invest more in fossil fuel-based electricity generation than China this year for the first time in many years. According to projections from the International Energy Agency (IEA), U.S. spending on coal- and natural gas-powered plants could reach approximately $50 billion in 2026, exceeding China's investment by roughly $3 billion.

A major reason for this increase is the rapid expansion of artificial intelligence infrastructure. Technology companies are building massive data centers that require enormous amounts of electricity, creating unprecedented demand for gas-fired power turbines. At the same time, turbine prices have climbed sharply because manufacturers cannot produce them quickly enough to keep up with orders.

The IEA estimates that American buyers ordered around 20 gigawatts of gas-fired turbine capacity during the first quarter of 2026 alone. Large AI data centers can consume between one and several gigawatts of electricity, comparable to the energy needs of an entire large city. Many of these projects are designed to generate electricity on-site rather than relying entirely on the public power grid.

Leading turbine manufacturers, including Siemens and GE Vernova, have experienced overwhelming demand. Major technology companies such as Alphabet, Amazon, and Meta are competing to expand their AI capabilities, fueling a surge in power infrastructure investment. GE Vernova reported an order backlog worth approximately $18 billion during its first-quarter earnings announcement, highlighting the strength of demand.

The increase in fossil fuel investment is also occurring as President Donald Trump's administration rolls back a number of climate regulations and clean energy incentives while encouraging domestic fossil fuel production. Some energy analysts believe these policy changes have slowed the nation's progress toward reducing carbon emissions.

Reid Ramdathsingh, a power analyst with Rystad Energy, noted that the United States benefits from abundant natural gas resources as it works to expand electricity generation. He also pointed out that gas turbine costs have risen dramatically, increasing from roughly $800 per kilowatt in previous years to more than $2,500 per kilowatt. In addition to supplying power for data centers, natural gas plants are becoming increasingly important for maintaining grid reliability alongside renewable sources such as wind and solar, whose output varies with weather conditions.

Recent energy data also indicates that coal use in the United States increased by about 10 percent during 2025. Higher natural gas prices, which rose by roughly 50 percent, made coal-fired generation more economically attractive. Rising energy market pressures linked to conflict in the Middle East helped keep that trend going into 2026.

China continues to build new coal-fired generating capacity as well, although construction costs there remain lower than the expense of installing gas turbines in the United States. At the same time, China has maintained an aggressive expansion of renewable energy. By the end of 2025, the country had installed approximately 1.2 terawatts of solar capacity—about half of all solar capacity worldwide. Each year, China adds more renewable generating capacity than many countries have in their entire power systems.

Despite significant growth in renewable energy, fossil fuels still supplied more than 80 percent of the world's energy in 2025. Global carbon emissions also continued to rise, increasing by approximately 1.1 percent during the year. Energy experts say these figures demonstrate that while cleaner electricity generation is expanding, much more progress is needed to improve energy efficiency, increase electrification, strengthen energy security, and accelerate investment in low-carbon technologies around the world.