The AI Power Surge is Here and Coal is Essential to Meeting It

Big tech’s scramble to deploy ever-larger data centers to serve AI has become the electricity elephant in the room. Across the country, power demand is soaring, and data centers with the energy needs of entire cities – and even states – are driving the surge.

Meeting this new demand will require new generation but also getting more power from the capacity already on the grid. Electricity markets are sending unmistakable signals that the era of early coal plant retirements is now long gone.

The Scale of the Challenge

At a recent Federal Energy Regulatory Commission conference on grid reliability, Manu Asthana, PJM’s CEO, said, “AI is going to change our world. In our forecast between 2024 and 2030, currently we have a 32-gigawatt (GW) increase in demand, of which 30 is from data centers.” That increase is equivalent to adding 20 million new homes to the grid in the next five years.

ICF International, a leading energy consultancy, expects national power demand to jump a stunning 25% by 2030 and nearly 80% by 2050. If that seems farfetched, consider Meta’s newly announced data centers.  

Mark Zuckerberg, Meta’s CEO, says the company will construct multiple data centers nearly the size of Manhattan. The first, called Prometheus, is expected to come online in 2026. These data centers are going to be able to scale up to 5 GW. As Jesse Jenkins, a leading energy researcher at Princeton, observed, a data center of that scale will use the same amount of power as the entire state of Nevada or Kansas.

Demand so large coming so fast underscores the incredible challenge now facing the nation’s grid operators and energy policymakers. As leading data center developers have underscored time and again, the AI industry is power constrained. Whether or not the AI revolution happens here – and can happen without placing an untenable burden on average ratepayers – will come down to the availability of affordable, reliable power to serve it.

A Plan to Prioritize the Coal Fleet

The Trump administration, for its part, is determined to meet the moment, and the U.S. coal fleet appears to be a centerpiece of the effort.

In a new AI Action Plan released this week, the administration outlines a series of actions to win the AI race, which includes building and maintaining the infrastructure needed to support it. The plan’s leading energy policy recommendation is to “stabilize the grid of today as much as possible.” The authors elaborate: “This initial phase acknowledges the need to safeguard existing assets and ensures an uninterrupted and affordable supply of power.”

Specifically, the administration calls for the U.S. to, “prevent the premature decommissioning of critical power generation resources and explore innovative ways to harness existing capacity, such as leveraging extant backup power sources to bolster grid reliability during peak demand.” The plan also calls for reforming power markets to better prioritize grid reliability.

Rich Nolan, the National Mining Association’s president and CEO, said of the plan, “the administration’s recognition of the importance of existing power plants and prioritization of safeguarding them is clear acknowledgement that the coal fleet is essential to U.S. AI leadership.” He added, “prioritizing the ongoing operation of essential coal plants – with the capacity to meet increased demand – combined with reforming our power markets around the goal of grid stability articulated in this action plan puts us firmly on the path for success.”