The Trump administration today is announcing more than $700 million in federal funds to support coal power infrastructure, including $185 million from 2021’s bipartisan infrastructure law that Congress appropriated for carbon capture and storage projects.
That funding will help build two new large coal power plants, the first to come online since 2013. It would also restart a 200-MW plant in Maryland, which was shuttered by AES in 2023 because, as the Independent Market Monitor for PJM wrote at the time, it was “not just uneconomic but extraordinarily uneconomic.”
The rest of the $700 million will come from the Defense Production Act, which gives the president significant authority over domestic industries in the interest of national defense. The GOP’s One Big Beautiful Bill, passed last summer, appropriated $1 billion for that purpose. Now, the administration will draw from the fund to support 13 existing plants as well as the development of a coal export terminal in Oakland, California.
Bloomberg initially broke the news, which was subsequently confirmed by Latitude Media. The White House intends to officially announce the plan later today.
Reviving the coal industry has been a key pillar of the second Trump administration’s energy agenda, and both the president and Energy Secretary Chris Wright have argued that coal is essential for meeting growing demand from artificial intelligence.
Coal contributes significantly to climate change, amounting to roughly 55% of total carbon emissions from the U.S. power sector in 2022. It also emits gases like sulfur dioxide, nitrogen oxides, and other particulates that harm the people living near coal plants.
The funding announcement comes in the midst of a national debate over whether the general public should foot the bill for the energy infrastructure needed to power the AI boom. The White House itself orchestrated a “ratepayer protection pledge” signed by hyperscalers in March, which is a non-binding commitment by the tech companies to pay for the energy and associated grid upgrades needed to power their growing number of data centers.
Of course, both pools of funding — the Defense Production Act and the funds appropriated for the Department of Energy’s carbon capture program, funded by the infrastructure law — come from taxpayer dollars. As one former DOE official, who spoke to Latitude Media on background, put it: “[Trump] is using tax dollars to pay for something the AI sector wants to provide for free. That’s not the art of the deal.”
The tricky task of using DOE funding
That DOE is using carbon capture funds to support coal projects isn’t a surprise: The agency released a notice of funding opportunity last fall which outlined two pathways for deploying $525 million in unobligated funding from the now-defunct Office of Clean Energy Demonstrations.
Awards, DOE explained at the time, would target two topic areas: coal projects providing “energy affordability, reliability, and resiliency” to rural communities, and projects seeking to recommission or modernize coal power plants. Despite the initial congressional intent of appropriating the funds back in 2021, selected projects will not require “immediate CCUS installation,” the notice explained.
This approach, former agency officials, legal experts, and Democratic members of Congress argued at the time, likely constitutes misuse of the funding as originally appropriated by Congress.
DOE announced a $175 million tranche of the rural communities funding a few months ago. The $185 million announced today is the first part of a $350 million pool for modernizing coal plants. The fact that the agency isn’t obligating the full $350 million is likely a sign that they didn’t receive as many applications for the program as they’d hoped, the former official speculated: “Usually DOE is way oversubscribed when it puts a funding amount out, and here they can’t even spend the money that they have.”
Coal for AI
The two new coal plants funded by the DOE are both explicitly designed to power data centers.
The first, a proposed 1.25-gigawatt coal-fired plant in Alaska, would be developed by the Terra Energy Center, an affiliate of Canadian company Flatlands Energy. But the project site is 70 miles from the nearest transmission line, and the mine needed to feed the plant doesn’t yet exist.
The second new plant receiving DOE funding is a 1.6-GW project proposed in West Virginia, which would provide power behind the meter to a 1-GW data center. Plans for that project, the developer states on the project website, include “a fully integrated carbon capture system designed to capture a large portion of CO2 from flue gas.”
Neither of the projects appear to have secured key permits or progressed beyond very preliminary development work. Nor have they lined up any data centers who have publicly committed to buy the power. It’s not clear how hard it may be to line up that offtake. While hyperscalers have pledged to reduce emissions and are aggressively investing in renewables and sources like geothermal, utilities are also increasingly turning to coal and other fossil fuels to meet electricity demands from data centers.
The third project DOE will fund is the restart of the Warrior Run coal plant in Cumberland, Maryland, a 205-MW dispatchable plant owned by AES, which retired in June 2024. As AES told FERC at the time, the plant was “excessive compared to other available sources” and had cost ratepayers nearly $1.3 billion in 2022 alone. But in its filing to FERC in 2025, AES said that data center load growth in PJM caused it to “reevaluate the economic viability of the Warrior Run facility.”facilityplant.”
Development hurdles aside, the projects are on shaky ground, explained Danielle Lemmon, a Washington D.C.-based energy consultant who previously worked in OCED. Senate Democrats pushed back against the initial notice of funding, arguing that if the funds were found to have been used in a way that wasn’t in line with their original intent, DOE awards could be rescinded.
“That makes the investments that are being dispensed [today] significantly less durable,” Lemmon explained.
“The Trump administration is responding to a real frustration that is a kitchen table reality for many people,” Lemmon said, nodding to rising electricity prices around the country. But those rising costs largely stem from the costs of aging infrastructure, rather than from a lack of generation. When it comes to reviving the coal industry in order to meet AI demand and bring down prices, “they’re looking to put a square peg in a round hole,” she added.
