AP – United States (US) President Donald Trump’s promise to go all in on fossil fuels includes praise for coal, a reliable but polluting energy source that’s long been in decline.
Trump this week suggested coal can help meet surging electricity demand from manufacturing and the massive data centres needed for artificial intelligence (AI).
“Nothing can destroy coal. Not the weather, not a bomb – nothing,” Trump told the World Economic Forum in Davos, Switzerland, by video link. “And we have more coal than anybody.”
Yet energy experts said any bump for coal under Trump is likely to be temporary since natural gas is cheaper and there’s a durable market for renewable energy no matter who holds the White House.
“It’s kind of been shown over the last three administrations even the president of the US can’t change markets, the trend for coal,” said University of Wyoming economics professor Rob Godby. “It might lead to a reprieve.”
Here’s a look at the outlook for coal during Trump’s second term:
AI WILL REQUIRE MORE ELECTRICITY
Efficiency gains have plateaued electricity demand in the US for 15 years, but that’s changing. More manufacturing, more electric vehicles, and energy-hungry computing centres necessary for AI are poised to strain the system.
Electricity demand for data centres alone will increase 10-20 per cent per year through 2030, while manufacturing of batteries, solar cells and semiconductors will require additional gigawatts of new power over the next four years, predicted Chris Seiple with analyst firm Wood Mackenzie.
While the tech industry is used to churning out new products to meet changing demand, electric utilities are not. Power plants and transmission lines often take decades of planning.
“The Trump administration is a four-year administration. It’s really difficult for utilities to make investment decisions in four-year windows,” Godby said.
A REPRIEVE FOR SOME OLD COAL PLANTS
Trump this week issued executive orders calling for prioritising energy development, such as by lifting regulations that impede development of fossil fuels.
That could lead to repeals of President Joe Biden’s power plant pollution regulations and an end to some policies that support renewables. Environmentalists cringe at the implications for climate change – electricity generation accounts for one-quarter of US carbon emissions, according to the EPA – but miners welcome the shift.
Unlike solar and wind power, which are subject to vagaries of sunlight and weather unless they’re paired with battery storage, coal-fired electricity can run around the clock with only periodic downtime for maintenance. Supporters say the nonstop power from coal meets the needs of technology facilities.
But while tech firms that want off-the-grid power might invest in a “dirt cheap” coal-fired power plant, Godby said, such plants need time to fire up. They aren’t very good for the kind of on-the-spot backup power Trump was referring to in addressing the Davos conference. For utilities, Trump’s comments were “a blank cheque to do whatever you want” in the short term despite prior attempts to address carbon dioxide emissions and expand renewables, said S&P Global analyst Dan Thompson.
But Thompson noted three of the companies driving the data centre boom – Google, Amazon and Microsoft – are the biggest corporate purchasers of renewable power and have made commitments to reach carbon neutrality.
That suggests a reprieve, not a comeback, for coal.
“It’s natural gas that will benefit the most from rising electricity generation,” Seiple said. “It’s very unlikely we will see new coal plants due to how expensive they are.”
