The US government is planning to announce a support package of up to $700 million for coal-fired power plants and imports to meet growing electricity demand, primarily from the data center market.

First reported by Bloomberg, the support is expected to be announced under the Cold War-era Defense Production Act, which provides executive powers to support private industrial production deemed vital to US security. A formal announcement on the funding package is expected later today.

Last July, the Trump administration declared data centers as critical national security infrastructure, issuing an executive order designed to fast-track their permitting and development. To meet the skyrocketing power demands, the administration has thrown its weight behind coal power as a crucial energy source - despite the fact that its domestic power share has hit historic lows, accounting for approximately 15 percent of the country’s electricity generation.

According to the reports, of the $700m, more than half will fund 13 coal plant upgrades, $185m will be used to match corporate funds for coal facilities in Alaska, Maryland, and West Virginia, and $75m will support the proposed West Gateway export terminal in Northern California.

Over the past year, the US government has announced a series of measures to support the beleaguered sector. Last April, President Trump signed a series of executive orders to “reinvigorate” the country’s coal sector to meet the surging energy demand of AI data centers.

The orders included edicts to “remove federal regulatory barriers that undermine coal production, encouraging the utilization of coal to meet growing domestic energy demands, increasing American coal exports, and ensuring that Federal policy does not discriminate against coal production or coal-fired electricity generation.”

Following this, the US Energy Secretary, Chris Wright, released a statement that the Trump administration expects the majority of the country’s coal-fired power plants to delay retirement to help meet energy demand from the AI data center sector.

The Department of Energy (DOE) has already used emergency powers to mandate utilities to extend the life of coal plants. In August, Wright enacted emergency powers directing Consumers Energy and the Midwest grid operator to keep the J.H. Campbell coal-fired power plant in West Olive, Michigan, running through November. Wright had already ordered the plant to continue operating in May, using an almost century-old law to enforce the ruling.

The DOE followed this up in October with a $625m funding package to support the retrofitting and recommissioning of coal-fired power plants.

The reinvigoration of the coal sector is likely to lead to significantly more emissions, with coal being the dirtiest form of energy currently available. Compared to natural gas, coal releases up to twice as much CO2 and is much more inefficient, requiring significantly more fuel to generate the same amount of electricity.