Mining company Peabody Energy believes that coal-fired power generation will remain key to the US energy mix for decades, supported by favourable policy, rising electricity demand and the limitations of alternative energy sources.

Speaking during the company’s latest earnings call, CEO James Grech said coal remained the country’s most valuable energy asset and was critical to future energy security.

“Coal is, quite simply, America's largest energy asset,” he said. “More than that, America has more energy in its coal, than any nation has in any one energy source. More energy than Saudi Arabia has in its oil, and more energy than Russia has in its natural gas.”

Grech, who was recently appointed to chair the newly reconstituted National Coal Council, believes it will be “irresponsible to not use this unique asset for the benefit of the American people”.

He said Peabody was positioned at the intersection of favourable structural and cyclical trends in global energy markets, citing the International Energy Agency’s latest coal report, which showed that global coal consumption reached a record 8.8-billion metric tons in 2025.

“That means that world coal use has nearly doubled in the 25 years since the new century started,” Grech said, attributing the growth to urbanisation, electrification and poverty reduction in developing economies.

He also pointed to the role coal played during recent extreme weather events in the US, when power demand surged and other energy sources proved unreliable.

“This occurs at a time when US went through a deep freeze and unsurprisingly to us coal moved to the top of the dispatch list on many of the most extreme days,” he said.

“Renewables are largely unavailable in multiple regions. And natural gas prices more than doubled in just one week.”

He said coal plants offered stability because they could stockpile fuel and avoid the volatility seen in gas and renewable markets. 

As a result, Peabody was seeing strong demand across both domestic thermal and seaborne metallurgical coal markets.

COO Malcolm Roberts also highlighted a sharp rebound in US coal-fired power generation during 2025.

“Coal fuel generation was up an estimated 13% year-over-year,” Roberts said. “That ran well ahead of any projections.”

He noted that coal production had increased by only about 4% over the same period, leading to a 15% decline in utility stockpiles.

“Coal has reemerged as a solution because demand growth was not only unforeseen, but unplanned for.”

Roberts said other forms of generation were unlikely to meet rising power demand, particularly from data centres and manufacturing facilities that require continuous electricity supply.

“Renewables continue to be built out. But don't solve the problem of data centers and factories that they 24/7 generation,” he said.

He added that new gas-fired plants faced long development backlogs, while nuclear projects involved lengthy permitting and construction timelines.

“And then there's existing coal plants, which ran at 42% of capacity in 2024. Versus 72% at historical high levels.”

He said increasing utilisation at existing plants could add up to 10% of total US power generation from 2024 levels and support demand growth for several years.

“That would also translate into more than 250-million tons per year in additional coal demand,” Roberts said.

Roberts also cited research showing that extending the life of coal plants was significantly cheaper than replacing them with new renewable capacity. “Replacing retiring coal plants with new solar sources, would be ten times more expensive than continuing to operate the coal plants,” he said.

He added that grid stability considerations were also driving utilities to delay plant closures.

“Plants that were slated for retirement have been extended in record numbers, with 35 GW of coal plants having seen their proposed retirements be deferred,” Roberts said.

Peabody recently signed a major supply agreement with a Midwestern utility for more than 20-million tons of Illinois basin coal over five years. The contract exceeds $1-billion in total sales over time.

He said the deal demonstrated changing utility behaviour and growing confidence in coal-fired generation.

“This is just one more sign, of course, that US coal plants are here for the long term,” Roberts said.