Climate Goals Go Up in Smoke as US Datacenters Turn To Coal

US datacenters are experiencing a significant shift toward coal-powered energy due to elevated natural gas prices and rapidly growing electricity demand. From a report: According to a research note from financial services firm Jefferies, datacenter operators are racing to connect new capacity to the electrical grid, with accelerated load growth expected during the 2026-2028 period. This spike in demand is driving an unexpected resurgence in coal generation, which has increased nearly 20 percent year-to-date.

The research note, seen by The Register, states: 'We raise our estimate for coal generation by ~11 percent (driven by higher capacity factors), and staying elevated through 2027 on favorable fuel pricing vs gas (particularly for existing fleet).' Warnings emerged last year that rising energy demand from the proliferation of data centers in the US risked outstripping available generation capacity, potentially extending the operational life of coal-fired power plants. Further reading: India Needs Coal For the Next Decade and Nobody Wants To Say It.

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