By Portia Roberts Lars Schernikau
On Sept. 19, the U.S. Department of Energy ordered two Indiana coal plants, slated to close, to remain available through Dec. 18, citing elevated reliability risks in the Midwest. The order is a small but vivid example of the two pressures facing the American power system: electricity demand is rising rapidly just as new generation and transmission face permitting, supply-chain, and construction delays. Existing dependable capacity therefore has value—even when policymakers prefer to retire it.
The episode highlights a reality often obscured in energy debates. Despite the politics of the anti-coal movement, coal-fueled power plants remain important for many reliable, affordable energy systems.
Coal is often described as a fading fuel. But the International Energy Agency reports that global coal demand reached a record 8.84 billion tonnes in 2025 and is projected to rise to 8.94 billion tonnes in 2026, contrary to prior projections.
Then there’s the gap between available power capacity and actual generation, which China illuminates particularly well. Although coal-fired generation declined (cheered by the anti-coal lobby), China still commissioned more than 78 gigawatts of new capacity in 2025 and expansion continues. The scale of China’s buildout is significant: its 2025 additions practically equaled Europe’s remaining operating coal fleet. India’s coal-fired generation last year also declined slightly, but its coal fleet was expanded with plans to increase it by nearly 50% over the next seven years. Vietnam, Kazakhstan, and other countries are pursuing similar expansions. New coal plants are now also planned in the US.
The gap matters because installed capacity offers those nations dependable means to increase generation to meet peak demand and growth. The lesson for the United States is that reliability requires asking what resources will be available when the system needs them most.
Coal’s value is optionality: dependable capacity available when demand spikes, fuel markets tighten, or weather-dependent generation underperforms. Unlike gas, months’ worth of coal can be easily stockpiled at or near power plants. Coal plants also provide dispatchable power and, like gas, hydro, or nuclear plants, use large “synchronous generators” that are a key to grid stability (and are not provided by wind or solar).
Recent market commentary illustrates the mechanism. Kpler reported in September that delivered cost of gas had risen above coal in both Atlantic and Asia-Pacific markets, encouraging more coal generation. In parts of Europe and Asia, coal has been cheaper than gas for long periods. Fuel markets, thus consumers, tend to prefer fuel optionality to keep costs down.
Industry, including industrial electricity, is the world’s largest coal-consuming sector. Metallurgical coal remains essential to blast-furnace steelmaking, while coal-derived carbon is used to produce metallurgical-grade silicon, used for solar panels, semiconductors, and other electronics. Coal also supplies energy and chemical inputs for cement, metals, chemicals, fertilizer production, liquids (CtL), and others industrial processes.
Energy policymakers should exercise care in pursuit of environmental goals that intend to eliminate the coal option. All large-scale energy systems involve trade-offs in land, materials, capital, reliability, and environmental performance. Wind, solar, hydro, gas, nuclear, coal and storage technologies such as batteries and hydrogen, all have environmental strengths and limitations.
Policymakers should pursue technology and flexibility rather than blanket eliminations. That means preserving existing coal plants when grid conditions require them, allowing utilities to consider new coal plants where they can be built and operated responsibly, modernizing older facilities, improving efficiency, and controlling air pollutants. The International Energy Agency’s work on high-efficiency, low-emissions coal shows the significant reductions to the environmental impact per unit of electricity is a technological challenge—not an argument for pretending coal does not exist.
Modern coal plants differ from the older facilities on which much of coal’s reputation is based. New designs and pollution technology cut conventional air pollution by as much as 99%, depending on the pollutant and the plant’s design. In some cases, for example, a modern large coal plant can emit less particulate matter than the traffic at a single busy intersection. The potential global benefit is substantial: if new technologies were used to increase by 50% the efficiency of the world’s coal fleet, that would add nearly two-fold the electricity currently supplied by global solar generation.
It bears noting the economic and geopolitical cost of the U.S. treating coal as a domestic environmental problem to be eliminated. In the real world that has merely led to coal-dependent industrial production moving overseas. Wealthy countries can create the appearance of lowering coal use by becoming more dependent on imported steel, solar panels, chemicals, machinery, and energy-intensive goods made in coal-reliant economies.
The DOE’s order for Indiana coal plants is about more than a temporary reliability fix. It is a warning against “energy subtraction,” i.e., prematurely retiring dependable resources. A serious energy strategy should preserve the option to use every reliable resource capable of keeping the lights on, powering industry, and protecting consumers from unnecessary cost and insecurity.
Coal is not returning from the dead. The world never stopped needing it.
Portia Roberts is Deputy Executive Director for the National Center for Energy Analytics, www.energyanalytics.org
Dr. Lars Schernikau is a Visiting Fellow with the National Center for Energy Analytics and author of The Unpopular Truth who has written extensively on energy economics topics, including coal, www.unpopular-truth.com
This article was originally published by RealClearEnergy and made available via RealClearWire.
