EIA Coal Forecast and German Renewables Surge Deepen Pressure on Baseload Front-Month
U.S. solar generation is forecast to rise 21% in 2026 while coal falls 8%, reinforcing a supply-heavy picture already weighing on German power contracts this summer.
The U.S. Energy Information Administration on Wednesday (2026-09-09) forecast American solar generation growing 21% in 2026 and a further 18% in 2027, with coal-fired output contracting 8% this year and 6% next, according to its latest Short-Term Energy Outlook. German baseload front-month contracts registered €161.82/MWh early Thursday (2026-09-10), well below day-ahead prices at €169.27/MWh, with domestic supply abundance doing most of the work in pressing the curve lower.6
The EIA projects total U.S. electricity sales reaching 4,211 billion kWh by 2027, led by the commercial sector, which will account for more than half the demand growth in both years. Natural gas generation is expected to grow just 2% this year and 1% next — modest given the scale of data-centre load being added — because solar is absorbing enough incremental demand to cap gas output. Coal, by contrast, simply retreats.6
The German supply picture has moved faster than many anticipated. Solar and wind generation in July 2026 ran roughly 40% higher year-on-year, Montel reported, a surplus that has kept coal plants largely sidelined and trimmed the need for more expensive marginal generation across the summer.4
That renewables surplus absorbed a physical shock that would ordinarily have tightened the market. Record low Rhine River levels caused barge disruptions to coal deliveries this summer, a normally reliable source of upward price pressure when German coal-fired capacity is running. Limited actual coal dispatch meant the transport bottleneck barely registered in prices, market participants told Montel.4
The structural trajectory makes a reversal difficult to construct. The IEA's Electricity 2026 report projects renewable output growing by roughly 1,000 TWh annually through 2030, with solar PV alone adding more than 600 TWh per year. Renewables and nuclear together are expected to hold 50% of the global power mix by the end of the decade.2
In the U.S., solar crossed a threshold in May 2026 that has become a reference point for structural displacement. Solar held a record-high 12.8% share of U.S. electricity supply that month, overtaking coal's 12.2% for the first full month on record, energy think tank Ember reported on Wednesday (2026-06-10). Coal generation had already hit an all-time monthly low of 39.3 TWh in April 2026. It recovered to 43.4 TWh in May 2026, but remained 11% below May 2025 levels, Ember data showed.3
The picture outside Western markets is less uniform. In China, coal power rebounded for the fourth consecutive month in April 2026, partly because Hormuz Strait shipping disruptions weighed on energy imports and forced greater reliance on domestic coal generation, according to the Centre for Research on Energy and Clean Air. India's electricity demand is set to grow 7% this year and 6% next, with coal supply constraints adding to grid pressure as AI data centres ramp capacity, according to analysis published in July (2026-07-29).1,5
Asian demand growth means global coal consumption could hold at elevated levels even as U.S. and European markets shed coal generation. For Germany, that dynamic is largely irrelevant this summer: the Rhine disruption demonstrated that local transport costs matter more than seaborne coal prices when plant utilisation is already depressed.4
The cross-sector transmission runs in one direction. Lower German baseload prices reduce European Union allowance demand, feeding softer carbon pricing across the region and compressing import costs for France and Italy. ICE Endex TTF front-month held at €79.29/MWh Thursday (2026-09-10), unchanged, keeping gas-to-coal switching economics broadly stable and adding no upward signal to the power curve.
The contingent risk to the bearish baseload case is sustained dry weather. High Rhine transportation costs are not a current market driver but become relevant if extended renewables lulls require thermal generation to cover demand this autumn. Montel noted market participants flagged elevated barge costs as a scenario to price rather than an active constraint — a distinction that closes quickly if wind output disappoints and coal plants are actually called on to run.4