US Coal Plan Shamelessly Picks Energy Winners & Losers

The Biden administration has announced a controversial plan to allocate $700 million of taxpayer funds to support coal-powered electricity generation in the United States, marking a significant departure from previous clean energy policies. This funding, partly sourced from the Bipartisan Infrastructure Law, will finance the construction of two new coal plants—the first since 2013—and the reopening of a 200 MW coal facility in Maryland that was previously deemed economically unviable. The move has sparked criticism given coal’s well-documented environmental and health impacts, as well as its high costs compared to renewable energy sources. Central to the administration’s strategy is the invocation of the Defense Production Act of 1950, a law designed to prioritise industrial production for national security and emergency preparedness. However, the justification for using this 76-year-old statute appears tenuous, with officials citing the energy demands of artificial intelligence development as the rationale. This has raised eyebrows and scepticism among observers, who question the legitimacy of framing coal power expansion as a national emergency, especially in light of the administration’s previous commitments to clean energy and climate action. Environmental groups and climate advocates have been quick to condemn the plan, highlighting the detrimental consequences of propping up coal infrastructure. Patrick Drupp of the Sierra Club described the policy as a betrayal of environmental promises, arguing that it prioritises the interests of the coal industry over public health and economic efficiency. The criticism is underscored by data showing that coal is the most expensive form of electricity generation, with long construction times and severe pollution concerns, while renewables like solar can be deployed more rapidly and cost-effectively. The broader context of the policy includes ongoing challenges within the US electricity grid, particularly the PJM Interconnection, which manages power supply for nearly 67 million people. Rising demand driven by data centres and artificial intelligence has strained the grid, leading to soaring electricity prices and capacity costs. Some officials have proposed breaking up PJM to improve efficiency, though the potential benefits remain unclear. Meanwhile, state leaders like Maryland’s Governor Wes Moore have criticised PJM for failing to anticipate and plan for surging power needs, highlighting the complexity of balancing affordability, reliability, and environmental goals in the evolving energy landscape.