The increasing demand for electricity to power Big Tech’s cloud computing and artificial intelligence applications has led to a renewed interest in coal-fired power plants in the US. Despite being a money-losing proposition in the past, these plants are now becoming more valuable due to their existing high-voltage lines connecting to the electricity grid. The Trump administration is using its emergency authority to encourage utilities to keep older coal-fired plants online, while tech companies, venture capitalists, and states are competing to redevelop retired coal plants into new energy sources such as gas, nuclear, wind, solar, or battery storage.
The Department of Energy has identified reusing coal plants as a key strategy to meet rising electricity demand, and there are federal incentives such as tax credits and loan guarantees to support the redevelopment of retired coal-fired plants. The Electric Power Supply Association expects some coal-fired plants to run longer than expected, but ultimately, they are still destined for retirement.
The high-voltage lines at retired coal plants are a valuable asset, allowing new power plants to connect to the grid quickly and bypass the bureaucratic hurdles of building new transmission lines. This has led to a surge of interest in redeveloping retired coal plants, with companies such as Vistra installing solar panels and energy storage plants at retired coal-fired plants in Illinois.
Nuclear power is also being considered as a potential replacement for coal, with lawmakers in Arizona advancing legislation to make it easier to build advanced nuclear reactors on the sites of retiring coal-fired plants. A study by Purdue University found that reusing a coal-fired plant site for a new nuclear power plant could reduce project costs by between 7% and 26%.
The redevelopment of retired coal plants is not only about generating electricity but also about creating new economic opportunities for communities that have been affected by the decline of the coal industry. In western Pennsylvania, the closing of a coal-fired plant had a significant impact on the local economy, but the announcement of a $10 billion plan for a natural gas-powered data center campus has brought new hope to the area.
Overall, the sudden demand for electricity to power Big Tech’s cloud computing and artificial intelligence applications has created a new opportunity for coal-fired power plants, and the industry is responding with a range of innovative solutions to meet the growing demand for energy.