Explained: what a $625m coal investment means for America’s energy transition
Sep 30, 2025
The United States coal industry, often seen as a legacy sector in an era of clean energy, is set to receive a significant boost. The Department of Energy (DOE) announced a $625 million investment package to modernise coal plants, extend their operational lives, and reinforce their role in the country’s energy system. The initiative, aligned with current administration priorities, comes at a time when many nations are placing greater emphasis on renewable energy.
Where the money will go
The DOE investment is divided into several areas:
- $350 million for recommissioning and retrofitting coal power units, keeping ageing plants in operation.
- $175 million for rural capacity and affordability projects, supporting communities that rely heavily on coal-fired electricity.
- $50 million for advanced wastewater management systems, helping plants reduce environmental impact.
- $25 million for dual-fuel retrofits, giving plants the option to switch between coal and other fuels.
- $25 million for natural gas cofiring systems, allowing plants to run fully on natural gas when needed.
Together, these measures are intended to support grid stability, protect coal-dependent communities, and ensure reliable electricity supply during a period of rising demand.
Why coal still matters
Coal’s share of US electricity generation has declined for two decades, largely due to cheaper natural gas, the growth of renewables, and investor pressure against carbon-heavy projects. Yet coal still generates about one-fifth of US electricity and remains an important source of reliability in some regions, particularly the Midwest.
This reliability is central to the DOE’s rationale. Recent grid stress events and blackouts have highlighted the need for dependable energy sources. The administration also points to coal’s role in national security and industrial competitiveness, particularly given the electricity demands of artificial intelligence data centres and heavy industry.
Different perspectives
Supporters of the plan argue it is a practical step. With demand increasing, renewables facing intermittency challenges, and international competition intensifying, coal is seen as a bridge to support reliability until newer technologies scale up.
Critics warn that investing in coal could slow progress on climate targets, arguing that resources would be better spent on renewables, storage and grid modernisation.
However, US Secretary of Energy Chris Wright recently highlighted the role of coal and other fuels in energy security. “We want a world well supplied with oil, well supplied with natural gas, and well supplied with coal so we don’t have spikes in energy prices. Those impinge on people’s lives and affordability and their opportunities in life,” he said in an exclusive Interview with Energy Connects.
He also linked the issue to technology and competitiveness: “The problem is the energy. We need to be able to develop new electricity in the United States fast. China’s been rapidly growing their electrical generating capacity. We haven’t had much growth in 20 years. So we need to pivot quickly.”
On climate targets, Wright said: “Net Zero by 2050 is a colossal train wreck and its targets are completely unrealistic… We can’t impoverish our citizens today, compromise our national security, all to make the world a few hundredths of a degree cooler three generations from now.”
What happens next
The $625 million package does not secure coal’s place in the long-term energy mix. Instead, it provides time – for plants to continue running, for rural communities to adjust, and for policymakers to navigate the balance between reliability and climate goals.
Whether it becomes a bridge or a barrier to the clean energy transition remains open. What is clear is that energy in the United States will be shaped as much by political choices as by technological progress.
