Coal-fired power generation in the United States rose sharply in early 2025, not because of policy support, but due to cold weather and rising natural gas prices.
The country faced its coldest winter in six years, which pushed up electricity demand. At the same time, natural gas became more expensive, making coal a more cost-effective option for power producers.
According to data from LSEG, total U.S. power generation increased by 5.5% year-over-year in January. From January through March, coal-fired electricity generation jumped 21% compared to the same period in 2024. In contrast, natural gas-fired generation dropped by 2%.
Coal prices have remained relatively stable, averaging about $76 per ton in the first quarter—only a 7% increase from last year. Natural gas prices, however, more than doubled, with the benchmark Henry Hub price rising from $1.83 per million British thermal units (MMBtu) in early 2024 to around $4 per MMBtu in March 2025.
This price gap made coal the more attractive option. Power companies switched to coal where possible to protect profit margins. As a result, carbon emissions from the U.S. power sector increased by 9% in January and February, reaching levels not seen since 2019, according to energy think tank Ember.
Electricity generation from coal rose across most of the country, except in the West. Natural gas usage showed a mixed pattern. The Mid-Atlantic and Southeast increased their gas generation, while other regions, including the Northeast, Central, West, Florida, and Texas, saw a decline.
Looking ahead, the U.S. Energy Information Administration (EIA) expects coal use in power generation to rise by 6% in 2025 due to continued high gas prices and strong electricity demand. Meanwhile, natural gas use in power generation could fall by 3%.
However, this trend is expected to reverse in 2026. The EIA projects an 8% drop in coal generation that year, while natural gas generation is expected to remain steady.
Carbon emissions are also expected to follow this pattern. The EIA forecasts a 2% rise in U.S. energy-related CO₂ emissions in 2025, driven by more coal use. In 2026, emissions are expected to decline by 1% as coal usage returns to near-2024 levels.
As the U.S. heads into the warmer months, gas prices may ease, but another spike could follow in summer with increased air conditioning demand. If natural gas remains costly, coal may continue to fill the gap, keeping emissions elevated in the short term.
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