Argus Media

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10 Oktober 2025 pukul 00.00

US efforts to revive coal industry may fall short

The latest round of efforts by US government officials to support the coal industry may provide a short-term boost to the fuel's use, but not alter its long-term decline.

The departments of Energy (DOE) and the Interior, along with the Environmental Protection Agency (EPA), last week unveiled a range of measures to delay coal-fired power plant closures and increase coal mining across the nation. Efforts included funding for coal plant upgrades, opening more federal land to potential coal leasing, a proposal to extend deadlines for compliance with EPA's 2024 effluent limitations rule and potential changes to regional haze rules.

A number of US utilities, including Big Rivers Electric, told Argus that they were still reviewing the initiatives. Tennessee Valley Authority said it is reviewing existing coal fleet "to consider extending their operations due to increased electricity demand". But "as of yet" it has not made any changes to previously announced decisions. Another utility that declined to be identified said it is also considering extending coal unit operations by a few years.

Coal's share in the US power mix has dropped to 16pc in 2024 from 49pc in 2010 and 51pc in 2000, according to US Energy Information Administration (EIA). Natural gas and renewables have risen over that period to 42pc and 23pc. Coal's share is forecast to rise to 17pc next year, the first increase in years.

The efforts announced last week were the second package of actions made by the administration of President Donald Trump this year that were explicitly intended to boost demand for coal. Trump signed a series of executive orders in April related to the industry, and various departments including Energy, Interior and EPA have been acting under his direction to resume coal leasing, repeal or adjust some environmental rules and delay some coal plant retirements in the months since he took office. The administration also has taken actions to potentially slow the buildout of renewable generation.

Some utilities in recent months have postponed coal plant retirements or acknowledged that the shift in federal government could affect medium-to-long term generation portfolio planning. This includes Arizona Public Service, South Carolina utility Santee Cooper and West Virginia subsidiaries of FirstEnergy and American Electric Power.

But utilities take months or sometimes years to formulate resource plans even before the time it takes to retire or add generating assets. In such cases where retirement dates are being reconsidered, utilities have to get state regulatory approval and often have to renegotiate with producers and railroads to increase flexibility and optionality in contracts and shipment volumes, which could in turn support higher coal prices for the prompt years' shipments.

PacifiCorp said that the impact of changes to state and federal energy policies are typically reflected in either updates to the utility's most recent integrated resource plans or in the next edition of the plan. The utility is scheduled to submit to state regulators an off-year update to its latest plan by 31 March 2026, and the next integrated resource plan is anticipated to be completed in March 2027.

In the nearer term, Energy Secretary Chris Wright has twice ordered temporary delays to retiring Consumers Energy's JH Campbell coal-fired power plant and he indicated last week that more emergency orders to keep coal plants across the US running beyond their scheduled retirement dates may be issued.

Coal-fired generation in much of the US has topped year-earlier levels since December 2024, before Trump took office, because of a colder than expected winter and higher natural gas prices. Increased electricity demand from data center growth and other industrial uses also both supported coal-fired generation and contributed to some organizations sounding greater concerns about grid reliability.

Still, some utilities are moving forward with scheduled coal plant retirements. Tri-State Generation & Transmission said it expects to close unit 1 of the Craig Generating Station in Colorado by the end of this year "and it will retire for economic reasons, in addition to legal requirements."

EIA this week projected the country's coal generating capacity at the end of this year would be 7.2GW lower than at the end of 2024. In January, it had forecast that 2025 coal capacity would shrink by 11.1GW.

No one has announced plans to build a new coal plant in the US since 2012.

Generators need to consider a number of different factors before committing to extending a coal unit's life. Cost remains a major hurdle, alongside a host of operational and logistical challenges as well as the potential for regulations to change under administrations succeeding Trump.

The $625mn DOE allocated last week for programs to modernize coal plants and possibly bring some shuttered facilities back on line, is a "small offer", said one US generator. The funds could possibly cover some of the costs for three or four units, the generator said, but are unlikely to be enough for the US to rescue a sizeable portion of its coal fleet.

"DOE's availability of federal loans and even grants can help mitigate economic risk of capital improvements or efficiency upgrades that were deferred due to prior retirement plans or regulatory uncertainty", Michael Nasi, an environmental and energy attorney with the Jackson Walker law firm, said.

"The most significant development in the preservation of coal-fired capacity is the elimination of legally questionable regulations that were creating uncertainty for the industry," Nasi noted. The shift in demand projections to account for industrial and data center load growth is another factor that will keep more coal units operational longer, he said.

The initiatives under the Trump administration may be helpful in keeping at least some of the coal-fired power plants running longer than previously expected. But coal is unlikely to regain its role as a dominant baseload resource in the US "anytime soon", Nasi said, given the scale of new construction that would be required to make that happen.

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