Shutting Down Almost Every Coal Plant and Swapping For Renewables Would Save Money, Report Finds

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Coal is dying in the U.S. Perhaps you’ve heard the reports. But even those reports don’t seem to capture how much of a dead man walking the dirtiest fossil fuel is.

An analysis released Monday from Energy Innovation, a energy policy shop focused on developing policies for a clean energy transition, finds that right now, its cheaper to tear down three-quarters of American coal plants and replace them with renewables than to let them continue operating. That number will only continue to rise into the future as renewables continue on their way to becoming among the cheapest sources of energy.

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The research has dubbed this inflection point the “coal cost crossover.” And many aging coal plants in the U.S. are on the wrong side of it. To reach that conclusion, analysts at Energy Innovation and Vibrant Clean Energy, another energy research group, took a look at public data on power plant operating costs and weather modeling about when the sun shines and wind blows. They then compared continuing to run existing coal plants with what it would cost to replace them locally with wind or solar.

The findings show that retiring 74 percent of American coal power plants and replacing them with wind or solar plants would provide an immediate saving to utilities. About 44 percent of that coal power is substantially at-risk, that is it could be replaced by renewables that are at least 25 percent cheaper. The biggest chunk of at-risk coal plants is in the Southeast where solar power, in particular, would provide a substantial cost savings.

The analysis includes projections to 2025 and finds that number of at-risk coal plants increases to 86 percent. That rise reflects the addition of a number of coal plants in the Midwest, places where wind is already cheap but where solar will become even more attractive as prices drop. Even the percentage of at-risk coal plants is likely conservative, because the analysis required any replacement renewables to be sited within 35 miles of the coal plant they would replace. Nor does the analysis include anything about the societal toll coal from contaminated groundwater to health issues tied with mercury and other heavy metals it emits.

The reason for the shifting economics is as much to do with falling renewables prices as it does the cost of operating coal plants, many of which were built decades ago. Eric Gimon, a senior fellow at Energy Innovation who co-authored the report, likened the fleet of U.S. coal plants to “an old jalopy you inherited.” But unlike those who keep up old cars as a labor of love, if you’re a person who likes to be able to turn on a light switch, you’re not interested in where the power is coming from: You just want it to be cheap and reliable. Coal isn’t the former nor is it necessary the latter anymore.

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At this point, bad policies and massive subsidies are doing as much to keep coal afloat as the Trump administration’s attempts to bail the industry out. Renewable energy storage also needs to come down in price, but that seems very likely to happen. The International Renewable Energy Agency forecasts battery prices could drop up to 60 percent by 2030. Michael O’Boyle, Energy Innovation’s director of electricity policy, said they hope the report gets consumers and energy companies to “take a harder look at what justification remain for keeping their coal plants around.”

The findings also show why the “just transition” portion of the Green New Deal, which covers how to ensure miners, power plant operators, and others on the front lines of the fossil fuel economy don’t get screwed, is so crucial. Because the last thing anyone wants is for coal’s inevitable demise to take down the people’s whose livelihoods depend on it.

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