Converting U.S. coal plants to renewable projects is cheaper than running them
Rapidly falling renewable energy prices coupled with sustainable incentives from the U.S. Inflation Reduction Act (IRA) are making coal an increasingly undesirable energy source.
This trend was confirmed in a recent report by Energy Innovation, a think-tank based in San Francisco, which claims that it costs more money to continue operating over 99 per cent of all coal-fired plants in the U.S. than to replace them with wind or solar energy projects.
Of the 210 coal plants that were reviewed in the report, it was found that solar replacement for 199 of the plants would be more economic than coal, solely based on the costs of energy generation. Wind was also found to be a cost-effective option for 104 plants and was even the cheapest option for 13 plants.
“Wind and solar energy are unequivocally cheaper than coal-fired generation across the country,” the report stated. “Replacing coal generation with local solar resources could drive up to $589 billion USD in clean energy investment in energy communities across the U.S.”
Train wagons loaded with coal in Norfolk, Virginia. (Kim Steele/ The Image Bank/ Getty Images)
Coal is the most carbon-intensive fossil fuel and releases many other pollutants such as sulphur dioxide and nitrogen oxides that contaminate ecosystems and are hazardous to human health.
According to a report from the International Energy Agency (IEA) released in December 2022, coal use potentially peaked in 2022 or could peak in 2023 before a plateau occurs. Global carbon emissions from coal-fired generation reached an all-time high in 2021 and exceeded 36 per cent of the world’s total electricity generation that year.
According to Energy Innovation, coal generation has declined by 52 per cent in the U.S. since 2010 and renewable power generation exceeded coal for the first time in 2020. Additional factors that are contributing to coal’s falling usage include clean energy policies, costly retrofits, the falling cost of natural gas, and improved energy efficiency in buildings.
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In addition to significant savings, the report notes that economic diversification, new jobs, tax revenue, and power reliability are benefits for local economies that replace coal plants with renewable projects.
The report noted that there are several barriers to replacing coal plants with wind or solar energy and suggested the following policies that can support the transition: utilities taking full advantage of IRA financing programs, requiring re-assessments of any utility investment plan that was completed prior to the IRA since costs are now outdated, and planning and funding from state legislatures and energy offices to support a coal community-centred economic transition.
Thumbnail image: John Ames Power Plant. It is a coal utility company located on the Kanoa River in West Virginia. (VisionsofAmerica/ Joe Sohm/ Digital Vision/ Getty Images)