King Coal Gets New Life as America Hunts for More Power
America is digging coal out of retirement. Trump committed $700M in federal funds to support the industry, including money for the first new US coal plants since 2013. And although Washington is betting on a revival, the market is still trying to size up the opportunity.
Securing the lifeboat: The package directs $425M through the Defense Production Act, a Korean War-era law typically reserved for national security priorities, to keep 13 coal plants running. Another $75M is earmarked for a proposed Oakland export terminal, while $185M in Energy Department grants will support new coal projects and restart a shuttered Maryland plant. Coal stocks rallied on the news.
- The Range Global Coal Index ETF and Peabody Energy both surged as traders bet federal support could extend coal's role in the US energy mix.
- Expected beneficiaries include Duke Energy, Hallador Energy, and American Electric Power, which operate coal-fired generation assets.
The Cost of Digging Back
OPIS analysts called the $700M package “tiny” relative to the billions needed for a meaningful coal revival. A single coal plant can cost more than $1B to build, yet just $185M is being spread across three projects. Critics have also questioned the funding source, noting the money was originally approved for carbon-capture technology under the 2021 infrastructure law.
- Coal’s share of US electricity generation has fallen from more than 50% in 1990 to ~17% today, with the EIA projecting further declines to 15% by 2027.
- More than 330 US coal plants have retired since 2010, and another 60 have already announced plans to close by 2031.
Long odds: Andy Blumenfeld of McCloskey by OPIS highlighted the key risk for investors, “What happens when the next administration comes in? Will they put a stop to it? I think that’s an enormous risk.” Still, coal-fired electricity generation climbed 13% in 2025 after Trump’s return to office, according to the New York Times, signaling real near-term momentum. The longer-term investment case hinges on whether AI’s growing appetite for electricity can offset coal’s structural decline. King Coal may have lost the crown, but it hasn’t left the castle.
