Federal report finds coal use increased as data center electricity demand reshaped US power grid.

Coal-fired power generation jumped 13% in the U.S. last year, according to the Energy Information Administration, pushing carbon emissions from the power sector up about 4%—the first increase after years of decline. Electricity demand is growing again after decades of stagnation, driven by the rapid expansion of AI data centers and increased air-conditioning use during hotter weather.

Utilities are now being asked to supply more power than they expected just a few years ago, said Steve Piper, director of North American power and renewables research at S&P Global Energy.

"You need more of everything," he said. "You need more green energy, of course, but you're also running your gas plants more, running your coal plants more, and that puts upward pressure on emissions."

Piper noted that coal became more competitive with natural gas last year, with the EIA report attributing much of the surge in coal generation to favorable fuel costs.

As utilities across the West race to add new power plants and transmission lines—projects that often take years to complete—some coal plants are being kept online longer than expected, according to Rob Gramlich, president of Grid Strategies, an electric power consulting firm.

"Coal plants were, by and large, on their way to retiring, one by one, year by year," Gramlich said. "But I think in many cases, they're being extended, and the pace of retirements is slowing."

Gramlich noted that renewable energy continues to grow, but utilities are expected to rely increasingly on natural gas in the near term while adding the generation and transmission capacity needed to meet growing electricity demand.

Both analysts identified a central challenge: building infrastructure fast enough to meet surging electricity demand while returning carbon emissions to a downward trajectory.