Trump tells Pentagon to cut deals with coal plants: What it means for energy, security, and the grid

Background

For more than a decade, coals role in U.S. electricity has steadily shrunk. Cheaper natural gas, a surge of wind and solar, and aging equipment have pushed coals market share from roughly half of U.S. generation in the mid-2000s to under one-fifth in recent years. Independent system operators (ISOs/RTOs) and state regulators have planned for this transition by adding transmission, storage, flexible gas plants, demand response, and new operating practices that maintain reliability with a different resource mix.

Against that backdrop, the Defense Department (DoD) has spent years pivoting to on-base resilience: microgrids, islandable backup power, batteries, and in some cases long-duration storage and advanced controls to keep critical missions powered even if the bulk grid falters. These measures are fuel-agnostic and designed around speed, redundancy, and local control.

A new directive from the White House aims to bend that trajectory. Framed in terms of national defense and electric reliability, it instructs the U.S. military to seek agreements with coal-fired power plants. The idea, as stated publicly, is that coals on-site fuel piles make it a uniquely dependable partner for keeping bases and the broader grid running during emergencies.

Energy economists, grid operators, and many engineers say the premise is outdatedand at odds with how the power system actually works today. Heres a guide to what happened, whats plausible under existing law, and the practical implications for cost, reliability, and military readiness.

What happened

• The White House issued a directive telling the Department of Defense to pursue agreements with coal-fired power plants, citing military energy security and grid resilience.
• The language points to coals on-site fuel inventories and "dependable baseload" characteristics as unique attributes that could support defense installations and critical infrastructure during disturbances.
• The order reportedly contemplates use of federal procurement authorities to prioritize such agreements, potentially invoking national defense rationales.

What the directive does not clearly reconcile is the complex reality of electricity procurement:

• Most U.S. military installations buy power from their local utility at regulated tariffs. They typically cannot command that their electrons come from a specific coal plant, because regional grids dispatch plants economically and operationally based on system needs, not bilateral preferences.
• In competitive markets, power flows are scheduled and cleared through ISOs/RTOs. A contract with a particular generator does not guarantee that generators output will serve a particular base, nor that it will be dispatched at all if its uneconomic or unavailable.
• Where federal installations do sign special dealsike long-term power purchase agreements (PPAs) or utility energy service contractsthey have overwhelmingly focused on cost savings and resilience via on-site or near-site resources, not remote thermal plants that cannot island with a base.

Why the stated rationale is shaky

1) Coals "on-site fuel" is not synonymous with resilience

Coal stockpiles can help withstand some fuel logistics disruptions, but they do not automatically prevent outages:

• Cold weather can freeze coal piles, conveyors, and sootblowers, degrading output or tripping units. During Winter Storm Elliott (2022) and other events, coal units posted significant unplanned outages alongside gas plants.
• Rail constraints, labor issues, and mine output fluctuations can and do affect coal availability. The U.S. experienced notable rail service bottlenecks for Powder River Basin coal in recent years.
• Blackstart capabilityhe ability to restart the grid from zerois rarely provided by large coal units. Hydro, combustion turbines, and increasingly batteries perform that role due to faster start times and lower auxiliary power needs. Many coal units require external power to restart and take many hours to come online from cold conditions.

2) Military resilience is about islanding and control, not just bulk fuel

Installations need power during grid failures. The most effective strategies are local and layered:

• Islandable microgrids that combine solar, storage, and fast-start generators allow bases to separate from the grid and continue operating critical loads.
• Redundant feeders and advanced controls, plus targeted demand management, keep mission-critical systems running even if supply is limited.
• On-site resources avoid transmission contingencies and market dispatch uncertainty.

A distant coal plant does not give a base the ability to island, and it cannot guarantee delivery through damaged or constrained transmission lines.

3) Grid reliability today is services-based, not fuel-specific

Reliability is maintained through a portfolio of services: frequency support, inertia or fast frequency response, voltage support, ramping flexibility, and resource adequacy. Coals contribution to those services is mixed:

• Inertia and voltage support can come from synchronous condensers, hydro, gas, and increasingly inverter-based resources using grid-forming controls.
• Ramping and flexibility are generally better with modern gas turbines, hydro, storage, and demand response.
• Resource adequacy is a planning construct met by many resource types; capacity markets and reliability constructs do not privilege coal per se.

4) Economics cut the other way

Coals operating costs (fuel, maintenance, environmental compliance) are typically higher than those of gas and renewables. Many units run at reduced capacity factors and face large refurbishment bills. Forcing federal buyers to enter above-market contracts could raise costs for taxpayers without delivering commensurate reliability benefits.

Legal and market mechanics: What authority could be used?

• Defense Production Act (DPA): Title I allows prioritization of contracts deemed necessary for national defense. Title III allows incentives to expand domestic industrial capacity when a shortfall jeopardizes defense needs. Using DPA to compel or subsidize general coal generation is a stretch; it requires a specific, demonstrable defense shortfall and a finding that no viable alternatives exist. Expect challenges if this tool is invoked broadly.
• Federal Acquisition Regulation (FAR): DoD procurement generally requires competition and best value. Mandating coal-specific awards could collide with competition requirements unless a narrowly tailored justification is proven.
• Federal Power Act and FERC jurisdiction: Wholesale markets are supervised by FERC. Private deals that distort dispatch, conflict with just-and-reasonable rate principles, or undercut open-access rules can face scrutiny. DOE can issue temporary emergency orders under FPA Section 202(c), but that tool is time-limited and event-specific, not a standing subsidy.
• State utility law: Many bases are captive customers of state-regulated monopolies. State public utility commissions set rates and resource plans. Forcing a utility to procure from a specific coal plant for one customer could raise state law and rate discrimination issues unless handled via broadly applicable tariffs.

In short, there are pathways for the federal government to procure energy and resilience, but none naturally point to long-term, coal-only deals as the most lawful or efficient solution.

How coal actually performs on a modern grid

• Start times and flexibility: Coal plants are slow to start and relatively inflexible at low loads. As variable renewables grow, systems favor resources that can ramp quickly and cycle without damage.
• Reliability records: Across multiple extreme weather events, outages have been multi-fuel. Gas shortages have been acute in some regions; coal units have also performed poorly due to equipment and fuel handling failures. The lesson grid operators draw is redundancy and weatherization, not a single-fuel bet.
• Aging fleet: Much of the U.S. coal fleet dates from the 1970s90s. Deferred maintenance can reduce dependability; life-extension is expensive and competes with cheaper new-build options (renewables plus storage or flexible gas).

Implications for the military

• Cost risk: Above-market contracts could divert scarce installation funds from proven resilience upgrades such as microgrids, hardened feeders, and battery backup.
• Mission alignment: The militarys energy mission is "assured power for critical operations." That is best served by local control and redundancy, not reliance on the hope that a remote unit will be online and deliverable during a regional crisis.
• Technology trajectory: Bases have successfully deployed on-site solar, battery storage, and microgrids, often with islanding capabilities and clear cost savings. Some have incorporated small, efficient gas turbines or fuel cells as part of hybrid systems. These investments produce measurable resilience metrics (ride-through time, critical load served) that a distant coal PPA cannot match.

Environmental and health stakes

Coal combustion produces particulate matter, sulfur dioxide, nitrogen oxides, mercury, and carbon dioxide. While many plants use scrubbers and controls, residual pollution burdens local air quality and public health. Federal agencies are normally expected to weigh such externalities and comply with environmental statutes. A pivot toward coal-specific procurement would increase emissions relative to alternative portfolios, with minimal resilience upside based on current evidence.

Key takeaways

• The directive tries to equate coal stockpiles with military resilience; that equivalence is technically and operationally weak.
• Power markets and regulatory frameworks limit the governments ability to direct energy from specific plants to specific bases.
• Proven resilience for installations comes from islandable microgrids, local generation and storage, and hardened distributionnot remote baseload contracts.
• Forcing coal deals likely raises costs and emissions while delivering little additional reliability compared with cheaper, faster alternatives.
• Any attempt to use extraordinary authorities (like the DPA) for broad coal support will face legal and practical challenges.

What to watch next

• Legal challenges and oversight

  • Will watchdog groups or states sue, arguing the directive exceeds statutory authority or violates procurement rules?
  • How will FERC respond if contracts affect wholesale market behavior or cost allocation?
  • Congressional oversight hearings on cost, legality, and national security rationale.

• Implementation details

  • Does DoD target specific services (e.g., blackstart, inertia, capacity) or simple energy purchases? The former could, in theory, be technology-neutral; the latter is not.
  • Are agreements limited to regions with genuine near-term reliability risks, or broad-based across the country?

• State and utility reactions

  • Public utility commissions may resist utility-customer arrangements that privilege one generator or increase rates without commensurate benefit.
  • Utilities with decarbonization mandates will have to reconcile state law with any federal pressure.

• Military energy posture

  • Do base microgrid and on-site generation projects slow down or get defunded in favor of remote contracts?
  • Are there pilots demonstrating measurable resilience metrics from coal-linked agreements? If not, expect internal pushback from installation energy managers.

• Market signals

  • Do RTOs see distortions in capacity or energy markets if federal buyers secure out-of-market coal contracts?
  • Does investment in cleaner reliability tools (storage, demand response, transmission) accelerate as counterweights?

FAQ

• Does coal uniquely provide "blackstart" capability?

  • No. Large coal units are rarely preferred for blackstart because they need significant auxiliary power and take hours to start. Hydro, combustion turbines, and batteries typically perform blackstart faster and more reliably.

• Can a military base choose a specific plant to power it?

  • Generally no. In most regions, the grid operator dispatches plants based on system needs. A contract with a plant settles money, not physics. Bases seeking assured power invest in on-site resources and islanding capabilities.

• Could the Defense Production Act force these deals?

  • The DPA allows targeted interventions for defense needs, but it does not grant unlimited power to subsidize a fuel type. Any broad use to backstop coal would need rigorous findings and would likely face court challenges.

• Would such agreements lower electricity costs for the government?

  • Unlikely. Coal plants tend to have higher operating costs than alternatives. Long-term, above-market contracts would probably increase federal energy spending relative to procurement that is technology-neutral and competitively bid.

• Isnt "baseload" necessary for reliability?

  • Systems need reliable energy and specific grid services, not a particular technology. Flexible portfoliosmixing renewables, storage, demand response, firm generation, and transmissioncan and do meet reliability requirements without depending on coal.

• What about nuclear plants role?

  • Nuclear plants provide firm, low-carbon power and some have blackstart arrangements via auxiliary systems, but even nuclears role is evolving toward flexibility and service provision. The directive at issue, however, is coal-specific.

• What should the military do to boost resilience quickly?

  • Prioritize islandable microgrids, on-site or near-site generation and storage sized to critical loads, hardened distribution, dual-feeds, selective load shedding, and robust maintenance and training.

Bottom line

The administrations directive asks the military to treat coal plants as bespoke reliability partners. Yet the physics of the grid, the economics of modern power systems, and the militarys own operational needs point elsewhere. If the goal is assured power for critical missions, the fastest, cheapest, and most controllable tools are local, modular, and technology-neutralnot long-distance contracts with aging thermal units. Expect legal tests and practical hurdles to determine whether this policy becomes a costly detour or a short-lived political gesture.

Source & original reading: https://arstechnica.com/science/2026/02/trumps-latest-plan-to-revive-coal-power-make-the-military-buy-it/