AI Power Demand May Breathe New Life Into Coal Energy

CNBC reported Sunday that the explosive growth of AI data centers is generating so much electricity demand that coal power could stage a significant comeback on the U.S. grid.

Coal Revival Driven by AI’s Growing Grid Appetite

The argument centers on raw numbers. Coal supplied roughly half of all U.S. electricity as recently as 2007. That share has collapsed to between 15% and 17% today. Yet the fuel still powers an estimated 173 to 190 gigawatts of capacity nationally.

Analysts now estimate the data center buildout could require an additional 90 to 100 gigawatts of new generation. That figure makes halting further coal plant retirements a serious policy option rather than a fringe idea.

President Donald Trump and Energy Secretary Chris Wright have both pushed aggressively to preserve coal as a domestic energy and national security asset. Their position is gaining practical weight as grid operators scramble for dispatchable power.

Babcock and Wilcox Steps Into the Spotlight

Engineering firm Babcock and Wilcox, a 160-year-old boiler and plant manufacturer, sits at the center of this story. CEO Kenny Young told CNBC the company now holds a $2.7 billion project backlog. The largest piece is a $2.4 billion contract tied to Base Electron, an entity backed by Applied Digital.

Applied Digital builds infrastructure for high-performance computing. Its own backlog stands at $16 billion, anchored heavily by a contract with cloud provider CoreWeave and a separate 15-year lease with an unnamed hyperscaler.

Babcock and Wilcox recently completed a share offering of roughly 10.8 million shares priced at $18.50, largely to strengthen its balance sheet ahead of planned expansion. The stock had closed above $21 the previous session and finished higher still after the deal.

A History of Decline and a New Political Moment

Coal’s fall from dominance over the past 15 years was driven by cheap natural gas, renewable subsidies, and tightening environmental rules. Generation from coal dropped more than 40% between 2010 and today.

That backdrop makes any talk of coal resurgence politically and environmentally charged. Environmental costs remain real and well-documented. But grid reliability pressures are reshaping the political calculus quickly.

Short sellers remain skeptical of some names in this space. Applied Digital carries roughly 32% of its float sold short. Critics have also questioned the ties between Base Electron’s backer and brokerage B. Riley, which holds a stake in Babcock and Wilcox and is currently under a Securities and Exchange Commission investigation.

Still, the core demand story appears durable. The question is which generation sources move fast enough to meet it.

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