As the United States faces an unprecedented surge in electricity consumption, driven by the rapid expansion of artificial intelligence (AI) data centers and increased electrification across various sectors, the coal industry is experiencing a notable resurgence. This revival is not merely a return to traditional energy sources but a strategic response to the evolving energy landscape.

Rising Electricity Demand and the Role of Coal

The U.S. Energy Information Administration (EIA) projects that electricity consumption will reach record highs in 2025 and 2026, with power demand rising to 4,205 billion kilowatt-hours (kWh) in 2025 and 4,252 billion kWh in 2026, up from 4,097 billion kWh in 2024 (1). This increase is largely attributed to higher electricity use in homes and businesses, especially due to the growth of data centers supporting AI and cryptocurrency, and the increased electrification of heating and transportation.

AI is expected to be a dominant contributor to this growth. According to the International Energy Agency (IEA), electricity demand from global data centers could double by 2026, largely due to the proliferation of AI and cloud-based technologies (2). This power-hungry infrastructure requires constant uptime, meaning it cannot rely solely on variable energy sources like wind and solar.

Coal-fired power plants, with their ability to provide consistent and dispatchable energy, are uniquely positioned to meet this growing demand. Unlike renewable sources, which can be intermittent and geographically constrained, coal plants offer a stable energy supply that is critical for the continuous operation of data centers, manufacturing facilities, and residential areas during peak load periods.

Policy Support and Industry Momentum

Recognizing the strategic importance of coal in ensuring energy security, the federal government has taken steps to support the industry. In April 2025, President Donald Trump signed an executive order aimed at revitalizing the U.S. coal sector. The order classifies coal as a “critical mineral,” opening up pathways for favorable permitting, prioritizing coal leasing on federal lands, and removing regulatory barriers that had previously accelerated plant closures (3).

Simultaneously, the Federal Energy Regulatory Commission (FERC) has shown growing flexibility toward utilities that are opting to keep coal assets operational longer. Plants in Maryland, Indiana, and other states have received permission to continue operations well beyond their planned retirement dates due to their value in meeting reliability standards under surging grid stress (4).

This shift has not gone unnoticed. Utilities such as the Tennessee Valley Authority (TVA) and Duke Energy have publicly stated they are reassessing the role of coal within their generation portfolios and exploring how to keep aging but functional coal plants available for periods of peak demand (5).

Market Dynamics and the Natural Gas Factor

Economic trends have further strengthened the case for coal. Natural gas, which has traditionally outcompeted coal on cost, has experienced sharp price volatility. Over the past year, natural gas prices rose by more than 60 percent, making coal a more viable alternative for power generation from a purely financial standpoint (6).

Wood Mackenzie analysts note that when natural gas exceeds $2 per million British thermal units (MMBtu), coal regains competitiveness in many regions of the country, particularly where legacy infrastructure remains in place and retrofit costs are minimal (7).

Conclusion

As the United States confronts the realities of a rapidly digitizing economy and intensifying energy demand, coal is reasserting itself as a critical component of the national power mix. The combination of dependable baseload capacity, political momentum, and improving economics positions coal as more than a legacy fuel. It is once again becoming a strategic asset.

This resurgence does not signal a reversal of clean energy goals. Rather, it underscores the need for a balanced approach, one that ensures the lights stay on while renewable systems continue to scale. For investors seeking to align with long-term infrastructure and energy trends, coal’s renewed relevance may offer timely and strategic exposure.

How May Investors Gain Exposure to Companies in the Coal Industry?

The Range Global Coal Index ETF (COAL) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Range Global Coal Index. The Index aims to track the performance of a portfolio of stocks that are involved in the met and thermal coal industry.

Sources:
[1] Reuters. “US power use to reach record highs in 2025, 2026, EIA says.” May 6, 2025. https://www.reuters.com/business/energy/us-power-use-reach-record-highs-2025-2026-eia-says-2025-05-06
[2] International Energy Agency. “AI is set to drive surging electricity demand from data centres.” April 2024. https://www.iea.org/news/ai-is-set-to-drive-surging-electricity-demand-from-data-centres
[3] Business Insider. “Trump signs executive order to revive coal amid AI energy demands.” April 2025. https://www.businessinsider.com/trump-coal-ai-data-centers-executive-order-2025-4
[4] Financial Times. “Coal plants get reprieve amid demand surge.” April 2025.
[5] Tennessee Valley Authority and Duke Energy press releases. April 2025.
[6] Bloomberg. “Natural gas jumps over 60% year over year.” Q1 2025.
[7] Wood Mackenzie. “U.S. Energy Economics Update.” April 2025.

Risk Disclosures:
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COAL ETF is distributed by SEI Investments Distribution Co.