There Is No Coal Comeback

Why It Matters

The trend shows that energy security is being met through renewable expansion rather than a return to coal, reshaping investment and policy priorities across the power sector.

Key Takeaways

• Global coal generation fell 3.5% in March YoY, excluding China.
• Renewables added 1,100 TWh in 2025, nearly double displaced gas.
• Italy's coal loss €80 m (~$86 m) yearly, minimal system impact.
• Europe has ~700 GW renewable projects awaiting grid connection.
• Grid bottlenecks, not fuel supply, limit energy security.

Pulse Analysis

The recent blockade of the Strait of Hormuz reignited fears of a coal comeback as oil and liquid gas flows were disrupted. Analysts warned that countries reliant on imported gas might revert to the dirtiest fuel, prompting announcements from Italy, Germany and several Asian nations to extend coal plant lifetimes. However, real‑time data from Crea shows a 3.5% drop in global coal power output for March, with the United States, India, the European Union, Turkey and South Africa all reporting lower generation. China’s 2% increase is the only notable rise, but it is excluded from the dataset, underscoring that the broader market is moving away from coal.

Renewable energy is the decisive factor. Ember’s 2025 figures reveal an addition of roughly 1,100 TWh of wind and solar capacity—almost twice the energy shortfall created by the Gulf crisis. This surge, combined with a 4% dip in gas‑fired generation driven by higher prices, means coal plants are already operating near full capacity and lack economic room to expand. In Europe, the challenge has shifted from fuel availability to grid integration; nearly 700 GW of renewable projects sit idle, awaiting transmission upgrades. Italy alone has 231 GW of approved projects still unbuilt, highlighting a systemic bottleneck that could stall the clean‑energy transition.

For policymakers and investors, the message is clear: accelerating grid reforms and unlocking stranded renewable capacity are far more critical than revisiting coal. The International Energy Agency estimates that software and contract reforms could free up to 185 GW of European capacity, dramatically improving energy security without resorting to carbon‑intensive sources. As coal‑related losses—such as Italy’s €80 million (~$86 million) annual deficit—prove financially unsustainable, the market is likely to double‑down on renewables and grid modernization, cementing a low‑carbon trajectory for the post‑war energy landscape.