By Mark Jaffe, EUCI energy writer
Soaring U.S. data center power demand for firm generation is reviving the prospects of coal-fired, nuclear, and natural gas-fired plants and creating a pivot in policy for the utility sector, according to two analyses.
“After years of emphasis on decarbonization, the strategic shift to firm legacy power generation sources puts the U.S. power sector at a crossroads,” S&P Global Commodity Insights said. “This reorientation has been primarily dictated by the massive data center build-out.”
S&P Global is projecting data center demand for electricity – in its low-end forecast – will double between 2025 and 2030 to consume 728 terawatt-hours annually. This demand will need firm power not easily provided by variable renewable generation.
U.S. electric consumption is expected to grow at a rate of better than 3% between 2025 and 2030, almost double the rate for the previous five years.
“Unrelenting load growth has led to a reconsideration of strategic energy priorities in the U.S.,” S&P Global said. “This shift is bringing nuclear, gas and, to a lesser extent, coal back to the forefront, pushing decarbonization objectives to the back burner.”
Gas and coal generation, however, will not alone be adequate to meet the demand according to an analysis by Wood Mackenzie, which sees peak demand reaching 90 gigawatts (GW) in 2030.
Based on current trends, coal and natural gas will meet just 37 GW of that increased demand.
“If more plant retirements are delayed, the value could rise to 67 GW, but significant uncertainty surrounds how many more retirements will be deferred,” said Patrick Huang, senior research analyst at Wood Mackenzie.
If coal and gas plants ramp up utilization, the existing thermal fleet could meet up to 47 GW of peak demand growth, Huang said.
There are, however, 98 GW of planned coal unit retirements through 2030. Even with retirement deferrals of 50 GW of coal units, coal and gas generation falls short of meeting total demand growth, Wood Mackenzie said.
As of mid-October 2025, deferred coal retirements totaled over 42 GW with an average 3.4-year deferral from the originally announced retirement date, according to a Commodity Insights analysis.
The trend, however, will be short-lived. “A coal resurgence in the U.S. faces formidable challenges in a world that is increasingly opposed to the fossil fuel,” S&P Global said. “The domestic appetite for coal remains lukewarm, rendering large-scale investments in new coal infrastructure economically unfeasible.”
More emphasis has been placed on natural gas generation, but this has come with its own challenges.
Utilities, merchant power developers, and industry ordered more than 14 GW of gas turbines in 2024 and 18 GW in 2025, creating a backlog and sending turbine prices higher.
The wait time for a turbine is now up to five years, and prices are two to three times as high as they were two years ago, S&P Global said.
With the expansion of liquefied natural gas exports, utilities are competing with the global market for natural gas, and the commodity price is up nearly 65% year-over-year through the end of September. The rising price of natural gas has also made coal-fired generation more competitive.
Through a combination of restarting old plants and investments in new technology, the nuclear sector is set to continue its momentum, S&P Global said, as federal incentives and the demand for carbon-free electricity has “revitalize the sector.”
The Trump administration is trying to foster a “nuclear renaissance” through a streamlining permitting, loan guarantees, and strategic partnerships, such as the $80 billion deal with Brookfield Asset Management to accelerate the development of Westinghouse nuclear reactors across the country.
The Palisades Nuclear Plant in Michigan is being restarted with the help of a $1.5 billion U.S. Department of Energy (DOE) loan. Unit 1 at the Three Mile Island plant in Pennsylvania is being put back into service – to provide power to Microsoft’s data centers – with a $1 billion DOE loan.
Another shuttered reactor – the Duane Arnold Nuclear Plant in Iowa – is also slated to reopen.
“New offtake agreements and investment deals between reactor owners and technology companies will likely continue in 2026,” S&P Global said. “Big Tech has helped catalyze the nuclear industry via agreements for nuclear generation, development investments and equity deals.”
Five reactor projects using new technologies are moving forward with decisions on construction permits expected in 2026, S&P Global said.
However, with the delays in getting gas turbines, the continued closure of coal-fired units, albeit at a slower pace, and the years it takes to get nuclear plants up and running, renewable generation still has a role to play over the next five years, according to Wood Mackenzie.
“Robust investment in renewables and storage will be required to meet U.S. demand growth in this timeframe,” Wood Mackenzie’s Huang said. “Also, given that solar only shines during the day and economic long-duration energy storage is not widely available, wind generation needs to be a key part of meeting demand growth.”
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