LITTLETON, Colorado, Sept 30 (Reuters) - The Trump administration's vows to provide federal land leases and power sector loans may ignite a brief and spotty revival in coal's fortunes. But other factors will determine whether a more durable recovery in the U.S. coal sector can take root.

Competition from other power sources, the cost of shipping coal from new mines to existing power plants and enduring opposition to expanding emissions levels may thwart coal's comeback despite the pledges for federal land and money.

CAPACITY TRAJECTORY

The single most impactful measure of potential coal use is the amount of power generating capacity available to the fuel.

Coal remains the third-largest source of electricity in the U.S. after natural gas and nuclear reactors, but its generation footprint has declined so much in the past decade or so that a quick rebound to previous highs is impossible.

The roughly 194 GW of coal-fired capacity remaining in operation is the lowest since at least 2000, meaning that coal's total electricity generation ceiling is sharply below where it was just a decade ago.

In order for coal to have any meaningful long-term recovery prospects in the U.S., a lot more coal-burning generation capacity will need to be brought online.

Currently, only 0.4 GW of new coal-fired electricity generating capacity is being planned in the U.S., according to Global Energy Monitor.

When complete, that new capacity would increase total coal-fired capacity by 0.2%, meaning that it would have no material impact on total coal volumes burned for electricity.

Only tens of gigawatts of new capacity would permanently lift coal's status in the U.S. generation mix.

POWER SHARE

While coal's total capacity has steadily declined in recent decades, coal's share of the U.S. electricity generation mix has been more volatile and has actually undergone something of a renaissance over the past year or so.

Between January and August of 2025, coal-fired power plants generated around 16.3% of U.S. utility-supplied electricity, data from Ember showed.

That share compared with a record low 14.7% in the year-earlier period. The rebound has given coal advocates hope that a sustained recovery in the fuel's use within the U.S. power system is underway.

However, several factors were in coal's favour in early 2025, but they may alter its appeal in the U.S. power mix going forward.

One key driver of coal's usage rebound in early 2025 was a surge in natural gas prices, which pressured utilities to cut costs and boost output using cheaper coal-fired power instead.

During the first half of 2025, coal prices averaged around $1.15 per megawatt hour less than natural gas, which provided generators with a strong incentive to cut gas output and crank up their use of coal.

Since June, however, coal prices have flipped to a slight premium to gas, which has reversed power firms' burn patterns and resulted in coal losing ground to gas.

If coal is to enjoy a sustained rise in use relative to other fossil fuels, it must retain a significant cost advantage to gas so that power firms are consistently incentivized to use coal instead of gas within their networks.

Such a persistent discount may be difficult to achieve given that coal can incur higher logistics costs than pipelined natural gas, especially from remote mines to distant power plants, which can require the use of trucks and trains.

RENEWABLES RISING

Coal has also lost power generation share to renewable energy supplies, especially over the past five years or so, as output from solar and wind farms scaled sequential records.

Utilities have added more solar and wind generation capacity than any other power source over the past decade, as hefty government subsidies drove the costs of adding more clean power below those of adding extra fossil fuel capacity.

In the future, many of the subsidies for renewables will be phased out, but most utilities are expected to still favor adding more solar capacity due to the speed of getting sun-derived supplies onto grids.

Many utilities are also expected to prioritise adding battery storage over other forms of generation, as these systems can allow firms to make maximum use of existing solar assets and potentially boost power market revenues.

POLLUTION OPPOSITION

Coal's sharply higher emissions profile than all other power fuels is another factor that is likely to prevent it from rapidly expanding its current usage footprint.

Coal-fired plants account for around 40% of total U.S. power sector emissions, despite generating less than 20% of U.S. electricity.

Coal-fired power plants emit around 950,000 metric tons of carbon dioxide per terawatt hour of electricity produced, according to Ember, compared with around 550,000 tons of CO2 per terawatt from natural gas plants.

Combined with the faster growth pace of renewables within the U.S. utility system, coal's hefty pollution toll is likely to ensure it maintains a declining role in the overall U.S. power system despite the current support from Washington.