Higher space heating demand and a growing power sector
Increased demand for space heating currently correlates directly with increased emissions, as the majority of homes in the regions with the coldest temperatures rely on natural gas and other fossil fuels for heat. Colder 2025 winter temperatures led to increased direct combustion of these fuels in buildings, driving up emissions by 56 million metric tons (MMT), or 6.8%, compared to 2024.
In the power sector, a 2.4% increase in total electricity generation and a 13% increase in coal generation relative to 2024 pushed emissions from electricity generation up by 55 MMT (3.8%). This marks only the second year in the last 10 years that coal generation has increased—a notable departure from its general downward trajectory, in which coal generation has shrunk by 64% since its peak in 2007. Power sector emissions also increased in 2024; this stretch marks the first consecutive two-year period of power sector emissions growth since 2012-2013.
Based on historic and forecasted sectoral consumption data, the largest source of increased electricity use was commercial buildings, where data centers, cryptocurrency mining operations, and other large load customers drove electricity demand up by 2.4%. This growth was concentrated in Texas, the Mid-Atlantic, and the Ohio Valley regions. Residential buildings saw the next largest increase, with electricity demand up by 2.2%. This was primarily due to space heating demand from colder winter weather, but electric vehicle consumption is increasingly a significant contributor. Industrial power demand, which accounts for a smaller share of total power demand, increased by 1.9% due to increased output in electricity-intensive subindustries.
The main driver of higher coal use was higher natural gas prices, up 58% at Henry Hub in 2025 compared to very low levels seen in 2024, as a result of high space heating demand from colder temperatures and rising LNG exports (Figure 4). Generation from coal and natural gas together made up 57% of total generation, down slightly from 58% in 2024, illustrating how these resources compete with each other.
The pace of coal plant retirements also slowed, as utilities delayed planned retirements to help meet rising power demand and in response to orders from the Department of Energy. Through November, only 2.5 GW of conventional steam coal capacity had retired, compared with 4.5 GW in 2024 and an average of nearly 9 GW a year since 2020.
At the same time, the fastest growing power generation source in 2025 was solar, which surged by 34%—its highest growth rate since 2017. This pushed the grid share of zero-emitting sources up by one percentage point to 42%, despite only a modest increase in wind and flat nuclear and hydroelectric generation. Natural gas remained the single largest source of electricity, though it fell by nearly three percentage points to 40% of the grid mix.