Several ageing coal plants in the United States are being kept operational longer than planned to cope with increasing power demand driven by artificial intelligence (AI) and concerns over grid reliability. The delays in plant conversions and shutdowns reflect a clash between the push for AI and manufacturing growth and the country’s decarbonisation goals.
US Delays Coal Plant Shutdowns to Meet Rising Power Demand
The United States is postponing the retirement of several ageing coal plants amid increasing power demand from artificial intelligence (AI) and grid reliability concerns. Alliant Energy announced on Thursday a delay in converting a Wisconsin coal plant to gas, moving the target from 2025 to 2028. Other delays include Talen Energy’s coal units in Maryland and FirstEnergy’s decision to keep two coal plants running beyond 2030.
Analysts have adjusted their forecasts for coal’s phaseout, with S&P Global Commodity Insights projecting 54GW of coal capacity will retire by 2030, a 40% decrease from last year’s estimate. The predicted average annual coal shutdowns have dropped from 10GW in the past decade to 7.5GW for the next ten years.
The shift reveals a clash between the drive for AI and manufacturing growth and US decarbonisation goals. Grid Strategies forecasts a 4.7% rise in US electricity demand over the next five years. The Electric Power Research Institute projects data centers will account for 9% of US power demand by 2030, more than doubling current levels.
Challenges include power equipment shortages, inadequate transmission infrastructure, and bureaucratic delays in grid connections. These issues cause multiyear waits for renewable projects to replace existing fossil capacity.
Critics suggest the US Environmental Protection Agency’s (EPA) guidelines for coal phaseout by 2032 may worsen grid reliability. The Midcontinent Independent System Operator reported 3.2GW of coal plant retirement delays this year.
Coal industry members hope legal challenges and potential policy shifts following the 2024 presidential election may favor coal generation. EPA reiterated the legal strength of its guidelines, emphasizing that the sector can meet electricity demand while reducing pollution.
US coal power generation has decreased significantly, from 40% in 2014 to 16% last year, according to the US Energy Information Administration. Despite the slowdown, analysts like Seth Feaster believe the overall trajectory for coal remains downward.
