By Frank Clemente and Fred Palmer, Coal is the Cornerstone LLC.

June 1, 2025 - Note: This is Part 2 of a two-part piece on the role coal must play if Artificial Intelligence and its associated data centers can be built to the extent projected. Part 1 discussed the growing need for coal to provide much of the massive amount of electricity required on a 24/7 basis. Part 2 demonstrates that alternative sources of power will largely be unable to meet the burgeoning demand from not only data centers but also from the societal push for electrification. Homework for tomorrow: Stop closing coal power plants.

Coal is the most available, reliable and affordable fuel for the US to meet unprecedented demand for electric power over the next 20 years. The Energy Information Administration (EIA) projects power generation to increase by 1,400 TWh -- more than six times the growth from 2004 to 2023.

Where will the US get the energy required to meet this dramatic increase in electricity demand over the next two decades? The Sierra Club’s anti-coal policy “Beyond Coal” is far more prophetic than its proponents realize. Because, apart from coal, the other fuels for electricity generation are often laden with unbridled hope, dreamlike assumptions and untested hypotheses-- all laboring under the harsh gaze of reality. Consider the constraints on other major sources beyond coal in supplying the electricity needed to meet burgeoning societal demand.

Natural Gas -- planners of data centers appear to be basing much of their optimism on the availability and affordability of natural gas (NG) going forward. On the surface, this is not an unreasonable assumption. NG has made a real contribution to reliable and affordable power in the US. The technology of fracking opened gas reserves that were not accessible even three decades ago. As a result, NG to produce power increased well over 80% from 2010 to 2024. And, like coal, NG is a domestic resource adding to secure energy for the future.

The EIA, however, has a much more cautionary view of the future role of NG in power generation. In fact, the EIA projects at least a 25% decline in NG generation by 2045. Anticipated Issues of supply and cost make it clear that utilities are looking askance at adding more NG generation to their fleet, regardless of the sanguine assumptions of data center planners. Electric utilities are well aware they cannot count on NG supply in extreme events, e.g. a polar vortex. There is plenty of evidence that NG is diverted to space heating in such instances. Significant NG supply increases cannot be taken for granted. There are already clouds on the horizon. Evidence is growing that the resource is geologically constrained and beset with a decline rate that necessitates constant drilling and a never-ending search for new locations.  This “Red Queen” effect is already showing up in production as operators are increasingly forced to move beyond Tier 1 drilling locations. In addition, NG prices are notoriously volatile, and last year alone ranged from $1.72 per million Btu to $4.20, an increase of 145% in just 12 months. 

Finally, the demand for Liquefied Natural Gas (LNG) is becoming increasingly intense. Europe, Asia and other parts of the world are looking to the US to supply LNG and domestic companies are rapidly ramping up export facilities to take advantage of these opportunities. Australia’s Woodside Energy, the developer of the Louisiana LNG export project, expects global LNG demand to jump 50% by 2030. Yet, CEO Meg O’Neill recently warned that Australian production may be waning, thereby increasing the need for the US to fill the LNG gap.

Nuclear has always been a viable alternative. Politics and vociferous opposition, however, have stultified the promise of the technology pioneered by the US, but where we have fallen so far behind. Bangladesh is building more nuclear power plants than America. President Trump has recently issued a series of orders to rejuvenate nuclear power. This is a positive step, but the history of nuclear power is replete with false starts and unfulfilled promises. As early as 1954, Lewis Strauss, the Head of Atomic Energy Commission, projected nuclear power would be “too cheap to be metered”. In nuclear, there has been “many a slip twixt the cup and the lip”

The US has a moribund supply chain that would take decades and massive resources to refurbish. Where are the nuclear welders, the reactor vessels, the fuel, the enrichment facilities, the closed University Departments of Nuclear Engineering? The students? The faculty? The jobs? The Bureau of Labor Statistics projects that employment of nuclear engineers will decline 1 percent by 2033.

The way we license nuclear power plants needs to be re-examined. As Robert Bryce has pointed out, the Nuclear Regulatory Commission has approved just five nuclear plants in the last 30 years and only two have been built. And these two Vogtle reactors in Georgia cost $35 billion, 2.5 times the projected price. Further, make no mistake, the opposition to nuclear is still there. Efforts to build new units, restart retired plants or build Small Modular Reactors (SMR) will face the broken supply chain, skeptical regulators, endless litigation and exploding costs.  The TVA recently stated it would cost $5.4 billion for an SMR, or about $18 million per megawatt.  And exploding costs are a valid concern, estimated costs for SMRs have quadrupled in less than 5 years.

Finally, regardless of operating plants, restarted reactors or SMRs, the National Academy of Science reminds us there is “no clear path forward for the siting, licensing, and construction of a geologic repository for nuclear waste”

THE INTERMITTENTS – Note- Data Centers require stable baseload power 24/7, not a crazy quilt combination of solar, wind and batteries.

In January, the MIT Energy Initiative warned: “There are simply not enough sources of renewable energy to serve both the hyperscalers and the existing users… conventional plants fired by fossil fuels such as coal are needed more than ever”

The Grid- Evidence is accumulating that there is an upper bound to the amount of intermittent sources which can be added to the grid and yet maintain stability. In discussing the massive April outage which impacted 55 million people in Spain and Portugal, Rystad Energy concluded high solar generation contributed to grid fluctuations, making the system more sensitive to voltage instability.

Grid complexities increase with integration of wind and solar, creating an increasingly large set of challenges. A study conducted by MISO (the electric grid operator for the central US) assessed the impact of rising shares of renewables in the system. MISO found that with less than 30% penetration, complexities rising due to renewables are contained locally due to enough dispatchable capacity in the system. But, when renewable penetration exceeds 30%, utilities and grid operators need to make fundamental changes to assure: (1) Energy adequacy- so the system can deliver sufficient energy every hour of the year; (2) Static reliability—handle deviations from normal without warning; and (3) Dynamic reliability -manage voltage, frequency and rotor stability. Structural changes to accommodate extensive renewables will not merely take time and a vast amount of money, but the effort will be irrelevant if the US cannot break China’s stranglehold on the means of renewable energy development.

National security, “Renewables” and China

The stark reality is the US and Europe have ceded control of renewable energy development to China. The PRC dominates almost every part of the supply chain whether it is solar PV modules, wind turbines, or batteries, usually enjoying a market share of more than 70%.

Per Bernstein analyst Nikhil Nigania, China’s share of global polysilicon and ingot - wafer production is close to 95%. Solar energy is only possible with polysilicon. While the US imports about two-thirds of its PV modules from Southeast Asia, many of the manufacturing facilities there are owned by Chinese companies. The so-called “Energy Transition” is increasingly hostage to China’s benevolence. In essence, China controls over 80% of global solar PV value chain.

Large battery energy storage systems (BESS) are increasingly important in stabilizing America’s energy grids, but the US relies heavily on Chinese imports for BESS components. On batteries, they completely dominate with ~90-95% control over electrolyte, separator, cathode, anode and cell. China processes about two thirds of the world’s mined lithium and has a significant role in processing other battery related minerals. Also, even when processing occurs elsewhere, China is a key player in the supply chain for the processing equipment.

Critical materials for advanced energy production are also dominated by China, which just this April imposed retaliatory tariffs on samarium, gadolinium, terbium, dysprosium and others. Such rare earths play essential roles in industries such as renewable energy, data storage, and nuclear power. The IEA report Global Critical Minerals Outlook 2025, is very sobering and demonstrates that China has a near-monopoly on numerous key commodities. The IEA found that “China is the dominant refiner for 19 of the 20 minerals analyzed, holding an average market share of around 70%.” Robert Bryce further documented the issue, warning China has a chokehold on about three dozen key elements in the Periodic Table, “with an average market share of around 70%” for each.

Wind- China has 60% of the world's turbine production capacity compared to 19% in Europe and less than 10% in the US (where capacity is declining).  Furthermore, according to Wood Mackenzie, Chinese turbine manufacturers also lead in product design and innovation. In the last four years more than 400 new Chinese turbine models were released, compared to less than 30 new models elsewhere.

Take off the handcuffs--The United States is facing unprecedented demand for electricity over the next 20 years. Alternative sources to expand electricity supply are limited by such factors as geology, cost, intermittency, politics and competition from other countries, Meanwhile, America has 27% of the world’s coal. This resource is time-tested, secure, reliable, accessible, affordable, and distributed across more than 20 states. The infrastructure to produce, transport and convert coal to electricity is already in place. Clean coal technology is real. Coal’s capacity factor can be significantly increased with a few strokes of a pen. Yet, we continue to close coal plants—go figure.

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Note: Coal is the Cornerstone seeks to give a voice to supporters of coal in its many dimensions and contributions. But we need help and ask like-minded individuals and companies supporting coal to make a financial contribution to the effort. Please contact Fred Palmer (vapalmers@aol.com) for details as to how you can support the fight for coal.

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Frank Clemente PhD Is Professor Emeritus at Penn State University. He 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 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 the University.

Fred Palmer 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”.