In 2025, US power plant owners planned to retire 12.3 gigawatts of generating capacity. They retired 4.6 GW, which was the least since 2008, and roughly a third of what was scheduled.
That gap is the most underexamined number in the energy transition. Utility decarbonisation commitments are built on retirement schedules and equity markets price those commitments. But the schedules and the outcomes have diverged sharply, and the mechanism driving the divergence is the same one underpinning the sector's premium valuations.
The mechanism
Data centre load growth has reversed the economics of plant closure. Bank of America projects data centres alone could add approximately 125 GW of US electric load between 2026 and 2030, pushing overall demand growth to a 4.1% compound annual rate. Large gas turbines are largely sold out through 2030, which removes the obvious replacement for retiring capacity.
Faced with load forecasts they cannot serve and new generation they cannot procure, utilities have deferred closures. At least 15 coal plants have had retirements postponed or delayed indefinitely since January 2025. Those plants emitted almost 65 million metric tonnes of greenhouse gases in 2023.
The pattern is visible at plant level. Alliant Energy's Columbia Energy Center in Wisconsin was scheduled to close in 2024, then 2026, and most recently 2029, deferred twice. We Energies extended South Oak Creek from end-2025 to end-2026. In Colorado, Xcel filed in March 2026 suggesting its Hayden units, scheduled for 2027 and 2028, might run a year longer or until 2030.
Federal policy has reinforced the trend. The Department of Energy has issued emergency orders under the Federal Power Act compelling coal plants to delay scheduled 2025 retirements. Those orders run 90 days but can be reissued, as has already happened at J.H. Campbell in Michigan.
Why it matters for valuation
The utilities extending fossil generation are frequently the same ones trading at premium multiples on clean energy positioning. Dominion Energy cited projected data centre demand in its integrated resource plan as a reason to delay retiring plants including the Clover coal peaker, while proposing a new 1 GW gas peaker in Chesterfield. Utilities across Virginia, Georgia, North Carolina and South Carolina have proposed 20,000 MW of new gas generation by 2040.
The market is pricing stated retirement trajectories but the delivered trajectory is slower, higher-emitting, and increasingly set by load forecasts rather than by commitment.
The constraint
Working out what actually caused each delay is harder than the headline numbers imply. Some deferrals predate AI entirely: California's AES Alamitos and Huntington Beach units were first scheduled to retire in 2020, then 2023, and remain open for reliability reasons unrelated to data centres. We Energies cited Midwest supply conditions rather than data centres when extending South Oak Creek. And the underlying demand forecasts may be inflated: prospective data centre developers routinely submit speculative interconnection requests across multiple states, which overstates aggregate load.
Separating genuine AI-driven deferral from ordinary reliability deferral requires filing-level evidence.
What would settle it
The EIA has scheduled 11 GW of retirements for 2026 (6.4 GW coal, 4.6 GW gas) while noting these plans are "more subject to change than usual."
If 2026 delivers another shortfall approaching the 2025 magnitude, deferral is structural rather than episodic, and the retirement dates published in integrated resource plans cease to be forecasts and instead aspirations, with any valuation built on them is pricing an intention.
References
- US Energy Information Administration, 'U.S. coal-fired generating capacity retired in 2025 was the least in 15 years', 13 April 2026. https://www.eia.gov/todayinenergy/detail.php?id=67427
- US Energy Information Administration, 'Retirement delays of U.S. electric generating capacity may continue in 2026'. https://www.eia.gov/todayinenergy/detail.php?id=67206
- Utility Dive, 'AI data center growth could force US utilities to rethink generation plans, BofA says', 17 July 2026. https://www.utilitydive.com/news/ai-data-center-growth-utilities-generation-plans/825541/
- Utility Dive, 'Coal- and gas-fired power plants have a new best friend: data centers', 25 July 2025. https://www.utilitydive.com/news/fossil-fuel-gas-coal-climate-data-centers/753565/
- EESI, 'Data Center Buildout Is Hungry for Fossil Fuels', 26 January 2026. https://www.eesi.org/articles/view/data-center-buildout-is-hungry-for-fossil-fuels
- Frontier Group, 'Data center energy use is giving old, dirty power plants a new lease on life', 9 January 2026. https://frontiergroup.org/articles/data-center-energy-use-is-giving-old-dirty-power-plants-a-new-lease-on-life/
- Industrial Info Resources, 'U.S. Coal-Fired Power Plant Retirements Slowed in 2025', 30 April 2026. https://www.industrialinfo.com/iirenergy/industry-news/article/us-coal-fired-power-plant-retirements-slowed-in-2025-future-is-uncertain--357093
Disclaimer
This piece is published by Howden Research for informational and educational purposes only. It is not investment advice, a personal recommendation, or an investment recommendation within the meaning of UK market abuse rules, and it is not an offer or solicitation to buy or sell any security. Howden Research is not authorised or regulated by the Financial Conduct Authority. Views expressed are those of the author at the date of publication and are subject to change. Contributors may hold positions in the securities or instruments discussed. The value of investments can fall as well as rise. Anyone considering an investment decision should seek advice from an appropriately authorised professional.
