America’s electricity grid is entering a period of profound change. After nearly 15 years of relatively flat demand, artificial intelligence, data centers, advanced manufacturing, electrification, and broader economic growth are creating the need for much more electricity. Meeting that demand will require preserving and modernizing the dependable coal generation the grid already has, as well as building new sources of electricity.
The National Coal Council prepared a new report, Maximizing the Value of the U.S. Coal Fleet, to position the coal fleet to respond to this enormous increase in electricity demand. The report was submitted to Secretary of Energy Chris Wright. Below are some of the report’s key findings and recommendations:
- Coal is a Critical National Asset
Coal power plants provide a combination of capabilities that cannot be easily or quickly replaced. They are dispatchable, maintain fuel on-site, provide high-capacity value during peak demand, and supply essential services that keep the grid reliable. They have also repeatedly demonstrated their resilience during severe weather, increasing output when other resources are constrained.
The existing fleet also represents decades of investment in generation, transmission, mines, railroads, equipment, and skilled workers. Preserving and modernizing coal power plants is generally less costly than replacing them with new generation and infrastructure which can take years to build.
Running the coal fleet at historic operating rates could provide some of the best incremental generation available to meet growing demand. For the nation to achieve a net increase in power supply, existing dependable resources must be retained while new resources are added.
- Why Coal Plants Continue to Retire
The report finds that the coal fleet’s decline has not been caused by market forces alone. Costly and frequently changing environmental regulations, subsidies for competing resources, state mandates, retirement agreements, and flawed electricity market rules have all contributed to premature plant closures.
These policies often fail to recognize or compensate coal plants for reliability, fuel security, and resilience. At the same time, plant owners face uncertainty that discourages long-term maintenance and investment.
The report therefore presents a practical set of recommendations centered on regulatory relief, electricity market reform, investment, and support for both the existing fleet and new generation.
- Establish Durable Regulations
The Environmental Protection Agency should complete the repeal or revision of rules that threaten otherwise viable coal plants, including greenhouse gas regulations and the 2024 Effluent Limitations Guidelines, and reform New Source Review so plant owners can make reliability, efficiency, and maintenance improvements without unnecessary regulatory risk.
Congress should codify major regulatory changes to provide durable certainty. DOE should also work closely with EPA, FERC, NERC, and grid operators to evaluate the reliability consequences of proposed and existing regulations before they force additional retirements.
The federal government should identify retirement agreements that threaten reliability and work with plant owners and state authorities to modify them where necessary. The Department of the Interior should also continue streamlining coal leasing, mine approvals, and permitting.
- Reform Electricity Markets
Electricity markets should properly value the services dependable coal power plants provide. The report recommends correcting price distortions caused by subsidized resources and improving the way grid operators measure capacity value.
Market rules should account for dispatchability, on-site fuel, generator upgrades, and performance during extended periods of system stress. Fuel security and other reliability attributes should be identified and compensated explicitly.
The report also recommends converting short-term emergency orders that keep needed plants operating into longer-term reliability arrangements with appropriate compensation. In addition, DOE and FERC should encourage bilateral contracts and co-location between existing coal plants and large electricity users, including data centers, through faster interconnection and permitting.
- Invest in the Coal Fleet and its Supply Chain
DOE should expand and streamline grants and loan guarantees for projects that preserve, modernize, and improve existing coal power plants.
Federal policy should also strengthen the broader coal supply chain. The Defense Production Act can support domestic manufacturers of the equipment and replacement parts needed to operate the fleet. DOE and the Department of the Interior should ensure that coal sources for specific plants have the necessary leases, permits, and transportation infrastructure.
The report further recommends that the Department of War procure a meaningful amount of coal-fueled electricity through long-term contracts, recognizing that fuel-secure power is a national security asset.
- Support New Coal Generation
Preserving the existing fleet is the immediate priority, but the report also calls for restoring the nation’s ability to develop new coal plants.
DOE should provide loan guarantees and grants for new coal generation, while identifying and removing regulatory barriers that prevent projects from moving forward. Retired coal sites may offer significant advantages, including transmission access, water, transportation infrastructure, experienced workers, and community support.
Finally, DOE should establish a process to monitor implementation of the report’s recommendations and report on progress. America needs more dependable and affordable electricity, not fewer coal plants. The National Coal Council report provides a roadmap for ensuring that coal continues to help meet that need. The full report, Maximizing the Value of the U.S. Coal Fleet, is available HERE.