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US renewable energy farms are more profitable than 99% of coal-fired power facilities

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According to a recent estimate, renewable energy sources have already economically outperformed coal in the US to the point that it would be more expensive to maintain 99% of the nation’s coal-fired power plants than to erect a brand-new solar or wind energy facility nearby. According to the study, it is now more affordable to build a set of solar panels or a group of new wind turbines and connect them to the grid than it is to maintain all but one of the 210 coal plants in the contiguous US due to the falling cost of renewable energy, which has been accelerated by last year’s Inflation Reduction Act. According to Michelle Solomon, a policy analyst at Energy Innovation, which conducted the analysis, “Coal is unquestionably more expensive than wind and solar resources; it’s just no longer cost competitive with renewables.” “This report definitely refutes the idea that coal is a permanent fuel source.”

The new analysis compared the fuel, operating, and maintenance costs of America’s coal fleet with the cost of constructing new solar or wind from scratch in the same utility region. It was conducted in the wake of the $370 billion in tax credits and other support for clean energy passed by Democrats in last summer’s Inflation Reduction Act. The marginal cost for new solar is roughly $24 per megawatt hour, which is about a third less expensive than the marginal cost for coal plants, which is typically $36 per megawatt hour. The only coal plant that can compete on price with the new renewables is Dry Fork in Wyoming. Finding this was a little unexpected, said Solomon. It demonstrates that the Inflation Reduction Act is speeding up this trend, in addition to the cost decline of renewable energy sources. The American grid used to be supported by coal, a fuel with a high carbon content that accounts for 60% of the planet-warming emissions from energy production. At its height in 2007, coal could power 186 million homes.

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But by 2021, this output had fallen by a whopping 55%, and the number of employees in the coal mining industry had more than halved during the previous ten years, to less than 40,000. The development of wind and solar energy needs to be accelerated, according to Michelle Solomon, so that we can eventually wean ourselves off of coal. The majority of US coal facilities are old and getting more expensive to maintain, while cheap gas sources have largely replaced their fuel. By requiring reductions in hazardous emissions like mercury and sulphur dioxide, environmental regulations—which Donald Trump threatened to pull back in an unrealized goal to revitalize the coal industry—have also put a financial burden on the company. In 2020, coal production reached a 55-year low, but after Russia’s invasion of Ukraine, which increased energy prices globally and put pressure on nations to find fuel alternatives to Russian gas, the sector started to show signs of recovery.

Supporters of coal argue that it is a dependable fuel source during uncertain times and have criticized Joe Biden for trying to wean the US off fossil fuels. According to Rich Nolan, president of the National Mining Association, “forcing vital coal capacity off the grid without reliable alternatives and the infrastructure to support them” will further exacerbate dependability and economic difficulties. “Look at our European neighbors who hurriedly and naively shut down coal facilities, and who are currently working from Germany to Denmark to reopen those same plants. It would be dangerous and inconceivable to take deliberate action to worsen the current global energy crisis, which is a serious issue that is costing people money both abroad and at home.

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Even though the use of coal is declining over the long term, it is unlikely to be completely phased out in the near future because many utilities are still heavily invested in the fuel source and because renewable infrastructure, such as energy projects, new transmission lines, and battery and other storage to deal with intermittent delivery, isn’t yet sufficiently developed to cause a widespread coal shutdown. However, economists claim that the broader trends, supported by last year’s climate investment, appear to be bringing an end to the coal era. We need to speed up the development of wind and solar so that, when the time comes, we can wean ourselves off coal, Solomon said. “We can’t just snap our fingers and retire all coal facilities,” he said. “This is a wonderful chance to support coal towns, increase local economic resilience, and make savings at the same time.” The research “rings true,” according to James Stock, a Harvard University economist who was not engaged in the Energy Innovation paper, and coal is no longer economically viable. We must shut down all of these plants gradually in order to maintain grid dependability, but we should be able to do so quite quickly, he said. “Coal has been declining naturally owing to economics, and those economics will continue; this transition will unavoidably take place. “We constructed numerous coal-fired power plants in the US roughly 50 years ago out of concern for global energy security. They provided a significant contribution, and it made sense at the time. However, because of the increased knowledge about climate change, we must now make different choices.

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