80% Of U.S. Coal Plants Are Uneconomic As Renewables Costs Drop

A coal-fired power plant spews smoke into the air in Daqi, Inner Mongolia, China. Baotou is an excellent example of a one-industry town, and that industry is steel. Baotou is also notorious as a big polluter, mostly from the large Bao Steel factory. With Baotou sitting directly west of Beijing, much of Beijing's notorious smog and haze comes from cities such as Baotou, which lay directly west. With the economic stimulus package that was just earmarked for infrastructure and housing, China's environmental goals have been put on hold for the foreseeable future. While the residents of Baotou may not mind, one wonders about those of Beijing. | Location: Daqi, Inner Mongolia, China. (Photo by Ryan Pyle/Corbis via Getty Images)

By Charles Kennedy

As much as 80 percent of the coal-fired power plants in the United States are already uneconomic compared to new wind and solar projects, energy and climate policy think tank Energy Innovation said in new research this week.

The combined costs for fuel, maintenance, and other costs at most operating coal power plants in the U.S are higher than the all-in costs of new solar and wind projects because of the cost declines of wind and solar generation, Energy Innovation said.

The think tank’s report, The Coal Cost Crossover 2.0, compares the economics of each U.S. coal-fired power plant against the expected economics of potential new wind and solar plants nearby, using publicly available data.

“Out of the 235 plants in the U.S. coal fleet, 182 plants, or 80 percent, are uneconomic or already retiring,” Energy Innovation said.

The key findings of the report show that of existing U.S. coal capacity, 72 percent is either more costly to operate than new nearby wind and solar or is slated to retire by 2025. Of the existing U.S. coal-fired plants, 80 percent are more costly to operate than new nearby wind and solar plants or are slated to retire by 2025.

Coal-fired power generation has been on a decline for a decade, as cheap natural gas from the U.S. shale plays first started competing with coal for power plants, and then falling wind and solar costs started to make new renewable energy projects more competitive than coal.

Renewables—mostly solar and wind—are set to account for more than two-thirds of the new electricity generation capacity that the United States will install in 2021, the U.S. Energy Information Administration said in a forecast early this year.

At the same time, due to higher natural gas production and increased natural gas-powered generation, coal-fired electricity generation capacity continues to retire in the United States.

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