A “Coal” to Arms, Does this Actually Buy Some Much Needed Time?
- Feb 23
- 4 min read
Energy Policy Perspectives Vol. 13 - February 23, 2026
Earlier this month, President Trump issued a new Executive Order (EO): “Strengthening United States National Defense with America’s Beautiful Clean Coal Power Generation Fleet”. We believe this EO will indeed temporarily slow coal retirements and preserve dispatchable capacity during this period of rapid load growth and infrastructure constraints by providing financial support to many coal plants, some of which had been slated for retirement.
So, what does it all mean? The EO directs the Department of War (DOW) to enter long-term Power Purchase Agreements (PPAs) and similar contractual agreements with coal-fired energy production facilities. Reports suggest there could be as many as 40 coal-fired facilities near military infrastructure. Other details are also unfolding - so far it has been reported that $175 million of DOE grants have been made to six companies in four states. The EPA is working to overturn the “Endangerment Finding” to reduce regulatory and compliance burdens that disproportionately affect coal units. The Trump administration has also leaned on emergency powers to order specific coal plants to remain online for reliability reasons even though these tactics are time-limited and often contested. The goal is clearly to prevent as many coal plant closures as possible between now and the next election or next shift in regulatory outlook; however, we do not believe this will reverse the long-term structural decline of coal even with a likely temporary roll-back by the EPA of certain existing pollution related regulations.
Temporary survival not revival. It goes without saying that we do not expect any new coal plants to be constructed in the U.S. (the last major U.S. coal plant entered service in 2013 - Sandy Creek Energy Station in Texas). However, coal’s share of U.S. electricity generation did increase in 2025 to 17% from roughly 16% in 2024 as coal filled the gaps caused by tight energy markets and weather issues. Prior to the Feb 11 EO, the independent U.S. Energy Information Administration (EIA) had forecast a decline of 5.6% for coal usage this year despite the expectation of higher coal usage through the first half. For 2027, the EIA had forecast a decline of 3.5%. We would expect this EO and other related Trump administration efforts in February to mute some of that decline in the next EIA published forecast.
Buying time negatively impacts renewables… Delayed retirements and extended operating lives of certain coal units will have implications for utilities by modestly smoothing near-term rate-base growth trajectories, acting as a bridge and pushing out some replacement capex. This would likely have the largest impact on solar and battery deployments, which utilities turn to due to their relatively quick installation timelines. For example, TVA’s Kingston Fossil Plant was to be retired in 2027 to be replaced with new gas generation and battery storage. Now, the coal plant will remain alongside the new gas plant; renewables were tabled.
… but could a few more years of coal actually lower U.S. utility industry risk? We continue to ask this question - what happens if AI should ever stall? Could the construction of significant new U.S. electricity infrastructure, with long lead times, potentially overshoot, even just for a short period of time, the actual digital electricity load demand of the future? While a future AI development plateau might be short-lived and the infrastructure ultimately be required, the short-term implications for U.S. utilities could be significant. Even short/intermediate-term stranded assets or underutilized assets could have significant financial and political implications for numerous utilities and states. Maybe the time bought by this EO increases policy optionality around capacity adequacy and could incrementally lower overbuilding risk by giving utilities a few more years to assess the longevity of current load growth projections tied to data center proliferation.
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