The Department of Energy has released additional details about how it plans to allocate the $625 million in coal investments it announced last week.
The vast majority of the funds — $525 million — will be distributed via 50% cost share awards, managed by the Office of Clean Energy Demonstrations. That office, which has been gutted over the last nine months and is now operating with a skeleton workforce, will issue up to ten awards.
Awards will target two of the topic areas outlined by DOE last week in its initial notice of the funding: projects seeking to recommission or modernize coal power plants, and coal projects providing “energy affordability, reliability, and resiliency” to rural communities.
The awards will draw from unobligated Bipartisan Infrastructure Law funding, DOE said. That includes the Energy Improvements in Rural or Remote Areas Program, and two of OCED’s carbon capture programs. However, the notice explains that the awards won’t require “immediate CCUS installation.” Carbon management components can be phased in at later stages, it explains.
This is a move that the administration appears to have been preparing for over the course of the last several months. In April, President Trump signed several executive orders instructing Energy Secretary Chris Wright to create a framework for keeping retiring coal plants up and running — a move which, according to some studies, could cost ratepayers $6 billion annually.
In May, DOE issued a mandate to delay the retirement of Michigan’s Campbell coal plant, and in July the agency released a dubious grid reliability study claiming that retiring coal and gas-fired power stations will lead to blackouts.
The notice of funding for coal projects draws directly from that July study to justify emergency funding for coal recommissioning and modernization, and points to the executive orders declaring a national energy emergency.
Activities to be funded include restarting, repairing, and upgrading coal units, with a particular focus on efforts to serve “critical loads” including defense installations, semiconductor factories, hyperscale data centers, and critical mineral processing plants.
Coal comes with high emissions, contributing significantly to human-caused climate change. It accounted for roughly 55% of total carbon dioxide emissions from the U.S. power sector in 2022, as well as harmful gases like sulfur dioxide and nitrogen oxides and other particulates, which cause health problems for those living near coal production.
But efforts to keep coal plants open also run up against the economic reality of coal in the U.S. In 2025 alone, U.S. power companies have announced they will close or convert more than nine gigawatts of coal-fired capacity, largely thanks to the fact that coal is more expensive and less efficient than fossil gas or renewables.
Accordingly, an analysis by the Institute for Energy Economics and Financial Analysis called the Trump administration’s efforts “legally questionable,” given the potential burden on ratepayers.
OCED on the chopping block
The coal generation funding notice follows news that DOE is terminating hundreds of awards issued during the Biden administration, including at least 61 OCED awards worth more than $12 billion.
That office in particular has been in the Trump administration’s crosshairs since well before the election last November.
Project 2025, the conservative policy blueprint compiled by the Heritage Foundation, calls for eliminating the office altogether, and shutting down all of DOE’s energy demonstration programs. The document also asserts that OCED’s funding, which provides up to 50% of the funding for first-of-a-kind projects as a cost-share, is “distorting energy markets and shifting the risk of new technology development from the private sector to taxpayers.”
