2026 Energy Crisis: How AI Data Centers and Middle East Risks are Reviving Coal Power in Asia

Implementation still lags after the agreement
Power concerns over AI data centers spread
Middle East risks deepen… coal surges
U.S. moves to pursue coal plant for first time in 13 years

Although the Paris Agreement has been in force for 10 years, analysts report that the global average temperature is rising faster than expected. Heightened risks in the Middle East and the rapid spread of artificial intelligence (AI) data centers have strained electricity systems, contributing to an unexpected rise in coal-fired generation.

On March 21, a synthesis of reports from the World Meteorological Organization (WMO), NASA and Reuters ranked last year (2025) as the 3rd-warmest year on record. 10 years after the Paris Agreement was adopted in 2015, indicators such as sea ice loss, ocean heat content and sea-level rise show no improvement and are reaching new thresholds.

The Paris Agreement is an international treaty established to confront the climate crisis. Adopted in Paris in December 2015, it entered into force the following November. It operates under the U.N. Framework Convention on Climate Change (UNFCCC), and as of January this year 194 parties participate.

The agreement’s core objectives are to keep global average temperature rise well below 2°C, to strengthen countries’ capacity to adapt to climate impacts, and to align financial flows with low‑carbon, climate‑resilient pathways.

The fact that the Paris Agreement has yet to produce the desired effects a decade on does not reflect a defect in the treaty itself; rather, critics point to failures in implementation.

The most pressing problem is emissions. Reuters reports that the WMO’s Global Atmosphere Watch found concentrations of carbon dioxide, methane and nitrous oxide all reached record highs.

Although renewable energy deployment is increasing, consumption of coal, oil and gas has risen as well. Observers estimate global CO₂ emissions from fossil fuels reached 38.1 billion tonnes in 2025, a new high.

A global carbon‑budget report compiled by more than 130 scientists projects that fossil‑fuel CO₂ emissions will increase 1.1% this year compared with last year, and that atmospheric CO₂ concentrations will be about 52% above pre‑industrial levels.

Despite these trends, major countries are expanding fossil-fuel capacity—especially coal—instead of accelerating renewables. The U.S. is pursuing construction of a new coal‑fired power plant in Alaska for the first time since 2013. Department of the Interior documents indicate this is the first U.S. push for a coal plant in 13 years.

Coal once supplied more than half of U.S. electricity generation; it now accounts for roughly 16%. That decline reflected a shift toward cleaner sources such as natural gas and renewables. But increased uncertainty over oil supplies from the Middle East and grid strains tied to booming AI data-center demand have brought coal back into consideration.

Countries across Asia, including India and Thailand, are moving to expand coal power and coal production. Reuters reports India is weighing running all coal plants at full capacity ahead of a summer surge in cooling demand. Thailand ordered coal plants to operate at maximum output this month, Bangladesh has significantly increased coal’s share of its power mix, and Taiwan says it may restart coal plants if LNG supply disruptions persist.

Meanwhile, Indonesia—the world’s largest coal exporter—has agreed to allow mining firms to raise coal production.