Grid Resurgence: How AI is Repowering Coal Plants with Gas and Renewables

The AI data center boom is prompting a resurgence in the repurposing of retired coal plants across the United States, as developers and utilities convert these aging facilities into hubs for renewable and natural gas-powered energy generation. With electricity demand projected to surge by up to 60% through 2050 to support AI infrastructure, the race to repower these plants is intensifying due to their preexisting grid interconnections, which allow for faster deployment than new projects. This trend is being driven by the need for speed and reliability in energy supply, as highlighted by Enverus senior analyst Carson Kearl: “Our grid isn’t short on opportunity — it’s short on time” [1].

Coal has played a dominant role in U.S. electricity generation for decades, but its share has steadily declined from over 50% in 2005 to just 16% today, largely due to the rise of shale gas and renewables. Despite this decline, coal still accounts for more than half of the nation's electricity-related carbon emissions. Converting coal plants to natural gas is seen as a key transition strategy, offering a 60% reduction in emissions compared to coal. Enverus estimates that at least 70 gigawatts of retired coal capacity—enough to power 50 million homes—can be repurposed into cleaner energy sources [1].

Xcel Energy, a major utility company, has been at the forefront of this transition, converting coal plants into gas-fired and renewable energy facilities. For instance, the company is repowering the Harrington coal plant in Texas to gas-fired generation and is also developing new wind and solar projects in the region. In Minnesota, Xcel is decommissioning the Sherburne County coal plant and replacing it with a mix of solar, wind, and battery storage, including a 100-hour battery system from Form Energy. These projects align with the broader goal of supporting data center growth, with Xcel and Meta already collaborating on a joint initiative [1].

The shift to natural gas is also being accelerated by developments in the Appalachian region, where EQT Corporation is playing a key role. The company is supplying natural gas to projects such as the Homer City Energy Campus and the Shippingport Power Station, both of which are being repurposed from former coal facilities. EQT's CEO, Toby Rice, emphasized the significance of the Mountain Valley Pipeline in enabling the AI power boom by transporting gas from the Marcellus Shale to markets in the Southeast and beyond [2]. This infrastructure is critical for meeting the rising energy demands from data centers and other AI-driven operations.

While renewable energy remains the long-term objective, current regulatory and policy uncertainties—such as the expiration of wind and solar tax credits after 2027—have led to an increased reliance on natural gas as a “bridge fuel.” Companies like Xcel Energy are leveraging this interim period to build scalable and flexible energy solutions. However, the industry also anticipates a future where new nuclear and geothermal facilities can contribute to the grid, albeit with longer lead times. In the meantime, gas-powered projects, combined with battery storage and hydrogen blends, offer a pragmatic solution to meet the urgent energy needs of the AI era [1].

The Trump administration’s pro-coal stance has temporarily extended the operational lifespans of some retiring coal plants, such as Maryland’s Brandon Shores and Michigan’s J.H. Campbell facilities. These extensions are not seen as permanent but rather as short-term adjustments to support the transition period. Meanwhile, coal industry groups have shifted their messaging from “clean coal” to more generic branding, reflecting the industry’s diminishing influence as renewables and gas gain traction. Despite this, coal companies are adapting by focusing on gas production and decarbonization efforts, including carbon capture and storage, to remain relevant in the evolving energy landscape [1].

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