Coal in the United States is now economically overtaken by renewables to such an extent that it is more expensive for 99% of the nation’s coal-fired power plants to continue operating than to build a whole new solar or wind power operation. nearby, a new scan has found.
The plummeting cost of renewables, which was supercharged by last year’s Cut Inflation Act, means it’s cheaper to build an array of solar panels or a cluster of new wind turbines and connecting them to the grid than continuing to operate all but one of the 210 coal-fired plants in the contiguous United States, according to the study.
“Coal is unequivocally more expensive than wind and solar resources, it’s just no longer competitive with renewables,” said Michelle Solomon, policy analyst at Energy Innovation, who undertook the analysis. “This report certainly challenges the narrative that coal is here to stay.”
The new analysis, conducted in the wake of the $370 billion in tax credits and other clean energy support passed by Democrats in last summer’s Inflation Reduction Act, compared fuel costs , operation and maintenance of the US coal fleet with the construction of new solar or wind systems from scratch in the same service region.
On average, the marginal cost of coal-fired plants is $36 per megawatt-hour, while new solar costs about $24 per megawatt-hour, about a third cheaper. Only one coal plant – Dry Fork in Wyoming – is competitive with new renewables. “It was a little surprising to find that,” Solomon said. “It shows that not only have renewable energy costs come down, but the Inflation Reduction Act is accelerating that trend.”
Coal, which is a carbon-intensive fuel and responsible for 60% of the planet’s heating emissions from electricity generation, once formed the backbone of America’s grid, generating enough power to light 186 million homes at its peak in 2007. However, by 2021, that production had fallen by 55%, while coal mining jobs have more than halved over the past decade, to reach less than 40,000.
Most coal-fired power plants in the United States are aging and increasingly expensive to maintain, while their fuel source has been largely replaced by cheap gas sources. Environmental regulations, which Donald Trump pledged to roll back in an unfulfilled mission to revive the coal industry when he was president, have also imposed costs on the sector by mandating reductions in toxic emissions such as mercury and sulfur dioxide.
Coal production hit a 55-year low in 2020, but the industry has seen signs of recovery following Russia’s invasion of Ukraine, which drove up the price of coal. energy in the world and pressured countries to find an alternative fuel source to Russian gas. .
Coal supporters argue it is a reliable fuel source in times of instability and have attacked Joe Biden for trying to steer the United States 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,” said Rich Nolan, president of the National Mining Association, in November.
“Look at our friends in Europe, who rushed blindly to shut down coal-fired power stations at a rapid pace and are now working from Germany to Denmark to get those same power stations back online. The global energy crisis is real and is imposing costly burdens on people around the world and here at home; taking deliberate action to escalate this 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 energy projects , new transmission lines and batteries and other storage to deal with intermittent delivery, is not yet large enough to trigger a massive coal shutdown. But analysts say broader trends, underpinned by last year’s climate spending, are likely to mark a shift towards the age of coal.
“We can’t just snap our fingers and pull out all coal-fired plants, but we need to accelerate the construction of wind and solar so that when the time comes we can wean ourselves off coal,” Solomon said.
“There is a huge opportunity here 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 have to do it in an orderly fashion to support grid reliability, but we should be able to do it fairly quickly,” he said. “Coal has had a natural decline due to the economy and that economy is going to continue, it’s a transition that’s going to happen.
“We built many coal plants in the United States about 50 years ago because we were concerned about energy security around the world. It made sense at the time and they made an important contribution. But we know a lot more now about climate change, so now we have to make different decisions.