Energy Explained

Get the latest as our experts share their insights on global energy policy.


Hear in-depth conversations with the world’s top energy and climate leaders from government, business, academia, and civil society.


Find out more about our upcoming and past events.

Energy Policy

The Future of Coal in the US Electricity System

The electricity supply system in the United States is in the midst of a rapid transition, increasingly adopting cheap wind and solar and shifting from coal to low-cost natural gas to produce electricity. With the electrification of transport[1] and a shift away from gas home heating toward the installation of heat pumps,[2] the US is also using more electricity for more things. At the same time, there are concerns that moving away from a long-established energy source like coal to renewables could present energy system reliability challenges.

Motivated by this concern, the US Senate Committee on Energy and Natural Resources (ENR) held a hearing earlier this month to examine the reliability and resiliency of electric service in the country. Dr. Melissa Lott, director of research and senior research scholar at the Center on Global Energy Policy (CGEP), testified[3] at the hearing.  This article examines key issues that arose around the role of coal in providing 24/7/365 electricity in the coming decades. A chief concern raised at the hearing was how quickly new and clean firm capacity, or power-producing capacity available at all times, can be added to make up for the retirement of old, high-carbon firm power.

Coal’s Decline in the United States

In the early 1920s, around 2 percent of the US workforce, in over 800,000 jobs,[4] was employed in mining coal that was used in industry and to make steel, power trains, and heat homes and businesses. Starting in the 1950s, the first coal transition occurred, during which it grew to dominate electricity generation while its other end uses dwindled (Figure 1). As domestic and commercial electricity demand expanded, coal use in electricity generation grew steadily to peak at 1,045 million tons in 2007.

The second coal transition occurred around 2008, when consumption fell rapidly, in large part due to rapid declines in the cost of natural gas, wind, and solar. This shift has emerged as the primary driving force behind recent CO2 reductions in the US.[5]

Coal and the Reliability of the US Grid

Coal power plant retirements were front and center throughout the US Senate ENR committee hearing. The arguments in favor of coal use weren’t for maintaining coal per se, but rather  signaled the importance of maintaining sufficient levels of firm dispatchable power on the grid.  CGEP research has highlighted the need for firm power even in a net-zero grid to help with maintaining both reliability and affordability,[6] but the argument that coal is the best candidate for this role deserves scrutiny.

First, is there any indication that low levels of coal in the system necessarily leads to low reliability? The latest 2021 state-level data from the US Energy Information Administration (EIA) shows no evidence that higher coal deployment is associated with a more reliable supply of electricity. Furthermore, the fact that populous, geographically diverse states like California and New York have all but phased out the use of coal suggests this is feasible in all US states. There is mounting evidence that the barriers to replacing coal are non-technical.[8]

Second, are there affordable alternatives to coal? Analysis by Energy Innovation shows that all but one of the US’s existing coal plants cost more to run than would a replacement renewable plant.[9] This is echoed by analysis from the International Energy Agency, which finds coal power has the highest levelized costs of any electricity generation technology in the US.[10] In addition, there are a host of costs that are not fully reflected in the market price of coal-powered electricity, most notably its vast CO2 emissions and public health impacts.[11]

Replacing Coal Jobs

The EIA projects further reductions in coal production in the coming years,[12] with the use of coal in US electricity projected to fall to half of 2022 levels by 2050.[13] If coal does disappear,[14] it’s essential that those who rely on the incomes it generates are supported to transition into new employment. Replacing remaining coal-powered electricity generation in the US with clean, low-carbon dispatchable power that provides stable employment prospects is central to maximizing the co-benefits of decarbonization. An absence of alternative employment prospects has had a severe negative impact not only on those who lose their jobs but also on the broader communities.[15] Academics at the University of Michigan[16] recently concluded that it is feasible to replace every coal-related job with local renewable generation and storage, but that local jobs would cost 5 to 33 percent (24 percent on average) more than lowest cost renewables.

Addressing Non-Technical Barriers to Coal Replacement

A shift to a zero-carbon grid, including phasing out unabated coal, requires infrastructure investment on a scale the US has never seen. Generation, transmission, and distribution will all need to be built to provide increases of total generation anywhere between 1.4 to 4 times current levels by 2050.[17] Demand management, interstate cooperation, and colossal expansions of volume of wires connecting generation to demand will be needed.[18] Collectively, this points to a legislative priority of the moment: permitting reform.

Dr. Lott’s written testimony to the Senate Committee on ENR includes recommendations that Congress could consider to speed up, streamline, and enable the transition in the US electricity system. These include:

  • Reforming environmental review and permitting processes for projects across the entire electricity sector (e.g., supply, transmission grid).
  • Better utilizing existing infrastructure and rights-of-way to accelerate projects that can provide near-term benefits.
  • Evaluating policies that support investment in a diverse set of supply-side technologies and necessary upstream systems.

A full consideration of coal’s costs and benefits makes its presence very hard to justify, but phasing it out entirely will require strong collaboration and strategic planning among policy makers, industry stakeholders, and affected communities to ensure the non-technical barriers to a clean, reliable grid are overcome.








[7] As measured through SAIFI/SAIDI figures for each state against state electricity coal percentage, graphed here.



[10], Figure 3.5.




[14] While nothing is certain in energy markets, a recent report by Brattle points to an extremely challenging environment for coal plant owners in the medium term.





Related blog posts

Explore More