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Coal in the US is now being outpaced economically by renewables to such an extent that it is more expensive for 99% of the country’s coal-fired power plants to keep running than it is to build an entirely new solar or wind operation nearby. , a new has found the analysis.
The plummeting cost of renewable energy, which was overburdened by last year’s Cut Inflation Act, means it’s cheaper to build an array of solar panels or a bunch of new wind turbines and connect them to the grid. to keep them running all year long. Of the 210 coal plants in the contiguous United States, except one, according to the study.
“Coal is unequivocally more expensive than wind and solar resources, it’s just not cost competitive with renewables anymore,” said Michelle Solomon, a policy analyst at energy innovation, who performed the analysis. “This report certainly challenges the narrative that coal is here to stay.”
The new analysis, conducted in the wake of $370 billion in tax credits and other support for clean energy passed by Democrats in last summer’s Cut Inflation Act, compared the cost of fuel, operating and maintaining the fleet of US coal with the construction of new solar or wind facilities from scratch in the same utility region.
On average, the marginal cost of coal plants is $36 per megawatt hour, while new solar power costs about $24 per megawatt hour, or about a third cheaper. Only one coal plant, Dry Fork in Wyoming, is cost competitive with new renewables. “It was a bit surprising to find this,” Solomon said. “This shows that not only renewable energies have come down in cost, but that the Inflation Reduction Law is accelerating this trend.”
Coal, which is a very carbon-intensive fuel and responsible for 60% of global warming emissions from electricity generation, it once formed the backbone of the American grid, generating enough power to light 186 million homes at its peak in 2007. Yet by 2021 this production had dropped by 55%while jobs in the coal mining sector are over halved in the last decadeless than 40,000.
Most US coal plants are aging and costly to maintain, while their fuel source has been largely displaced by cheap gas sources. Environmental regulations, which Donald Trump promised to reverse an unfulfilled mission to revive the coal industry when the presidentthey have also imposed costs on the sector by imposing cuts on toxic emissions such as mercury and sulfur dioxide.
Coal production reaches 55 years low in 2020 but the industry saw later signs from a spike in the aftermath of the Russian invasion of Ukraine, which sent up the price of energy worldwide and put pressure on countries to find an alternative fuel source to Russian gas.
Supporters of coal argue that it is a reliable fuel source at a time of instability and have attacked Joe Biden for trying to steer the US away from fossil fuels. “Forcing essential coal capacity off the grid, without reliable alternatives and the infrastructure to support them, will only deepen reliability and economic challenges,” Rich Nolan, president of the National Mining Association, said in November.
“Look at our friends in Europe, who blindly rushed to close coal plants at a rapid pace and are now working from Germany to Denmark to bring those same plants back online. The global energy crisis is real and places expensive burdens on people around the world and here at home; taking deliberate steps to escalate that crisis is reckless and unthinkable.”
While coal is in long-term decline, it is unlikely to disappear in the immediate future: many utilities are still deeply invested in the fuel source and scale of renewable infrastructure, including power projects, new lines transmission and battery storage and others to cope with intermittent delivery, is not yet large enough to trigger a massive coal shutdown. But analysts say broader trends, fueled by last year’s climate spending, appear poised to call the end of the coal age.
“We can’t just snap our fingers and retire all coal plants, but we must speed up construction of wind and solar power so that when the time comes, we can move away from coal,” Solomon said.
“Here is a great opportunity to invest in coal communities, build local economic resilience and save money in the process.”
James Stock, an economist at Harvard University who was not involved in the Energy Innovation Report said the analysis “rings true” and that coal is no longer economically competitive.
“We can’t shut down all these plants tomorrow, we need to do it in an orderly way to support grid reliability, but we should be able to do it in fairly quick order,” he said. “Coal has been in a natural decline because of the economy and that economy is going to continue, this is a transition that is just going to happen.
“We built a lot of coal plants in the US about 50 years ago because we were concerned about energy security in the world. That made sense at the time and they made an important contribution. But now we know a lot more about climate change, so now we have to make different decisions.”
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