Coal Fights Back Amid AI Data Center Power Grab

The resurgence of coal as a major player in the US energy mix is an unexpected consequence of the rapid growth of artificial intelligence. As AI data centers devour electricity, utilities are delaying the retirement of coal-fired power plants and even bidding to keep them running.

Data center electricity demand is projected to balloon from 176 terawatt-hours in 2023 to between 345 and 580 TWh by 2028-2030, with natural gas supplying over 40% of this energy, followed by renewables, nuclear, and coal at approximately 15%. The Department of Energy has issued emergency orders to retain more than 17 gigawatts of coal capacity online.

Utilities like Southern Company are extending coal plants as long as they can, according to CEO. This trend has significant implications for the crypto mining industry, which competes with AI data centers for cheap electricity. As AI companies lock in long-term supply contracts and acquire power plants, miners operating in regions with heavy data center buildout should expect higher power costs and tighter grid constraints.