‘Burning Money:’ Dept. of Energy Directs $100 Million to Modernize Declining Coal Plants

The U.S. Department of Energy has announced up to $100 million in federal funding for projects modernizing the nation’s remaining coal plants, nearly half of which were slated to close by 2030. 

The investment, a fraction of what would be needed for a comprehensive upgrade, is unlikely to make coal power more affordable, energy experts and anti-coal advocates say.

On Friday, U.S. Secretary of Energy Chris Wright issued the Notice of Funding Opportunity, calling for applications to design, implement, or test refurbishments and retrofit systems that allow coal plants to “operate more efficiently, reliably, and affordably.” 

The announcement outlined three key areas for development projects: advanced wastewater management systems, systems that enable plants to switch between coal and natural gas, and advanced “co-firing” systems that allow simultaneous combustion of both fuel types.

The funding comes just a month after the department announced $625 million to “expand and reinvigorate” America’s coal industry. 

That investment already included $350 million to recommission closed coal power plants or modernize plants and $100 million for the three development areas outlined in Friday’s announcement. The DOE did not respond to questions about why additional funds were announced just a month later.

Trump’s investments in coal are a drop in the bucket of what would realistically be needed to revamp the plants, said Michelle Solomon, a manager in the electricity program at Energy Innovation, a nonpartisan energy and climate policy research firm based in San Francisco.

“Those types of retrofits for a single plant can cost hundreds of millions of dollars,” said Solomon. “To do that for every plant in the coal fleet, you’re looking at billions of dollars. And you’d be putting those billions of dollars into clunkers. Literally burning that money.”

In April, following Trump’s “Beautiful Clean Coal” executive order, the Department of Energy rolled out a series of actions intended to reinvigorate American coal production. The department reinstated the National Coal Council as a federal advisory committee, offered long-term financing for coal infrastructure, designated coal as a critical material and mineral and ended a moratorium prohibiting new coal mining leases on federal land.

“You’d be putting those billions of dollars into clunkers. Literally burning that money.”

— Michelle Solomon, Energy Innovation

Last week’s funding announcement advances Trump’s commitment to restore U.S. energy dominance, the official press release read. 

“For years, the Biden and Obama administrations relentlessly targeted America’s coal industry and workers, resulting in the closure of reliable power plants and higher electricity costs,” U.S. Secretary of Energy Chris Wright said in the report. “Thankfully, President Trump has ended the war on American coal and is restoring common sense energy policies that put Americans first.”

Yet Trump’s attempt to save coal from the brink is unlikely to succeed.

In 2001, coal made up half of the electricity generated by utility-scale facilities in the United States. Today, it accounts for less than a fifth of generated power; the decline reflects the changing energy landscape.

The decline of coal energy is due to rising coal prices and the proven cost-effectiveness of alternative energy sources, including solar, wind and natural gas, said Solomon. 

Analysis by Energy Innovation found that coal prices increased 28 percent between 2021 and 2024, while inflation rose only 6 percent in that time.

At 99 percent of U.S. coal plants—209 out of 210—it would be cheaper to replace energy with new wind and solar than to keep them operating, a 2023 Energy Innovation analysis found.

The Sierra Club has led the charge to close power plants in the U.S. through their decades-long “Beyond Coal” campaign. The new coal funding is “just the latest Trump administration action that harms people and the planet,” Sierra Club climate policy director Patrick Drupp wrote in a statement to Inside Climate News.

“Their pro fossil fuel agenda is intent on keeping deadly and expensive coal plants alive while Americans foot the bill and suffer the public health damage,” Drupp added.

Trump’s emergency orders to keep operating multiple coal plants slated for retirement have cost ratepayers tens of millions of dollars in the last year alone.

A 90-day emergency order requiring continued operation of Consumers Energy’s J.H. Campbell coal plant in Michigan has generated an additional $80 million in costs since May. The company has said that it will seek payment from ratepayers across the Midwest, in accordance with the cost-collection process set by the U.S. Department of Energy.

Trump has repeatedly argued that coal is critical to improving the reliability of the American energy grid amid surging power demand. But the reliability of coal plants may be overstated.

Between 2013 and 2024, forced-outage rates (excluding planned outages for maintenance) for coal exceeded those for other major sources of electricity, including gas, nuclear and hydroelectric power, according to a report by the North American Electric Reliability Corporation.

Most coal plants in the U.S. were built before 1990. Keeping those plants running as they age requires more and more money, leading utilities to schedule retirement dates for nearly half of all plants.

Solomon uses the analogy of car ownership to explain the decline of coal energy in the U.S. “If you have a car that has 250,000 miles on it, very little is going to bring that car back to new,” she said. “You can only do so much when the infrastructure is that old.”