Peabody Energy Forecasts 57% U.S. Coal Demand Growth Amid Utilities' Increased Output

Peabody Energy forecasts a 57% increase in U.S. coal demand due to rising electricity consumption and utilities ramping up coal plant output. The company expects strong gains in coal demand as utilities take advantage of well-performing coal plants to meet increased electricity needs.

Peabody Energy Corp. has projected a significant 57% increase in U.S. coal demand, driven by rising electricity consumption and utilities ramping up coal plant output. The St. Louis-based mining giant expects utilities to boost coal plant output to "historic capacity factors," which could lead to an additional 250 million tons of annual demand in the coming years [1].

According to Peabody, the U.S. is experiencing a surge in electricity demand, with a projected 25% increase through 2030. This growth is fueled by factories, increasingly electrified homes, and the expansion of data centers used for artificial intelligence. Meanwhile, supply-chain constraints have hindered the addition of new natural gas plants, leading to increased reliance on underused coal plants [1].

Peabody's forecast assumes that coal plants are operating at close to 100% capacity, which is unlikely to be achieved in the real world, according to analysts. The U.S. fleet was operating at just 42% last year, compared to 72% in 2008. Even with this increase, the actual demand could be lower than Peabody's projection [1].

The Trump administration's pro-coal policies, such as blocking a Michigan power plant's plan to shut down this year, have also contributed to the expected increase in coal demand. However, it is important to note that the U.S. coal usage has been declining steadily as utilities shift away from the dirtiest fossil fuel. Total consumption is expected to be 439 million tons this year, up 6.7% from last year but well down from its 2007 peak of 1.13 billion tons [1].

The Department of the Interior has announced that it is moving forward with the sale of several coal industry leases this fall, including two in Tuscaloosa County, Alabama. These sales reflect the Trump administration's commitment to strengthening American energy dominance and supporting local economies [2]. The leases cover a combined 14,050 acres beneath private lands, containing roughly 53 million tons of recoverable metallurgical coal [2].

The proposed leases are expected to lead to the extraction of 16.9 million tons of federal coal from the No. 4 mine and 36.3 million tons of saleable coal from the Blue Creek Mine No. 1 over their respective lifespans. These expansions are expected to employ approximately 425 and 500 employees annually, respectively [2].

While the proposed expansions are not expected to exceed National Ambient Air Quality Standards, the Bureau of Land Management's environmental impact statement warns of potential impacts on private well water quality and the risk of subsidence and methane gas leaks [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-09-03/peabody-expects-big-jump-in-us-coal-demand-in-trump-era
[2] https://www.alreporter.com/2025/09/03/bidding-on-two-proposed-alabama-coal-mine-leases-to-be-held-in-september/