Despite years of forecasts of imminent decline, coal demand keeps growing. While the final numbers aren’t in, the International Energy Agency (IEA) recently found global coal demand was on track to rise by 0.5% in 2025, reaching a record 8.85 billion tonnes.

With energy affordability and security globally paramount, the irreplaceability of coal shouldn’t be that surprising. What may surprise, however, is the role of U.S. coal demand last year in driving global demand growth. Of the 40 million tonnes of increased global demand, 37 million tonnes came from the U.S. That increase reversed a 15-year downward trajectory in the U.S.

Driving resurgent U.S. coal use was rising electricity demand and rising natural gas prices. And these dynamics appear to have staying power.

Rapidly rising power demand driven by the data center and AI revolution is the new normal. Renewed natural gas price volatility after years of remarkably low and stable prices also seems likely. New gas turbine orders keep increasing, LNG export capacity is soaring but the trajectory of U.S. natural gas production – and the appetite of drillers to ramp up output – is far more uncertain. Through December of 2025, U.S. natural gas prices jumped 70% in a year, reaching a level not seen since the energy crisis following Russia’s invasion of Ukraine in early 2022.

Coal generation jumped 13% last year and played a critical role in shielding consumers from the full bite of soaring natural gas prices. The average coal plant capacity factor jumped back up to 50% last year after falling to 42% in 2024.

While natural gas prices have retreated from their December highs, don’t expect coal demand to evaporate. The new era of surging power demand – coming on the shoulders of already tight power supplies in much of the country – is the elephant in the room.

Rising Power Demand is Here to Stay

Peak winter power demand across the North American grid jumped by 20 gigawatts (GW) in just a year, more than doubling the rate of recent increases. And the tsunami of data center power demand continues to build.

Analysis from Grid Strategies, a leading energy consultancy, sees U.S. peak power demand jumping a stunning 166 GW in the next five years. That jump is equivalent to 15 times the peak demand of New York City. Grid Strategies’ latest forecast marks a six-fold increase in projected demand in just the past three years.

Rising power demand isn’t just a U.S story. While data centers are driving demand here, electrification, urbanization and rising living standards, such as increased cooling, are sending electricity demand soaring globally. The IEA forecasts global electricity demand jumping 40% by 2035. Coal is essential to meeting it.
 
Will global coal demand continue to grow in the years ahead? Predicting coal’s trajectory is a tricky business. In 2023, the IEA announced peak coal demand and expected a decline only to see demand jump and set two new records.

Global coal demand has nearly doubled since 2000, and coal remains the leading fuel for electricity generation. Coal is here to stay.