Dave Johnson Power Plant outside Glenrock. Image by Dustin Bleizeffer/WyoFile
The US is at a "cost crossover" in coal generation. The rapidly declining cost of wind and solar energy, together with the combined fuel, maintenance and other costs of coal power now make it more expensive than its renewable counterparts, according to a new study.
The study, carried out for renewables analysis firm Energy Innovation, found that local wind and solar could replace around 74% of US coal with an immediate saving to consumers. It is estimated that this figure will rise to 86% by 2025.
The study made use of public financial records and data obtained from the Energy Information Agency (EIA) to calculate the cost of energy from coal plants compared with that from wind and solar within a radius of 35 miles. It was found that 211 Gw, 74% of the current coal capacity, is providing a more expensive output than solar or wind.
The analysis strengthens existing research into the costs of clean energy and suggests that local decision-makers should begin drawing up plans for a smooth shutdown of the old coal plants whilst assessing their options for replacement, sustainable electricity production, as well as other financial options for the communities who have become dependent on their coal plants for the local economy.
The Energy Innovation reports come as states and US territories begin to look to California and Hawaii's example in their commitment to 100% renewable energy. New Mexico has since followed suit with Puerto Rico to vote on the issue in the coming week.
Coal plants have been struggling with rising costs, such as requirements to install pollution controls, for some time. Simultaneously, the cost of renewable energy has plummeted as the technology has improved and uptake has increased. Cheap, abundant natural gas has also hit coal demand. The EIA reported in January that around 50% of coal mines have closed down over the past decade.
Earlier this month, Curtis Morgan, the chief executive of Vistra Energy Corp., a Texas-based energy company acknowledged that coal is unlikely to regain its market share. Speaking during a panel discussion at CERAWeek in Houston, Mr Morgan said "“coal is on its way out. More and more plants are being retired.”
Not the first time Mr Morgan has spoken in such terms, in April last year, he told CNBC: “I don’t believe [coal] is going to have a renaissance. I think it’s on its way out. As much as I believe it is going to be part of the energy infrastructure around power, I believe that other sources are now catching up with coal in terms of the overall costs.”
Renewable sources now account for around 17% of US electricity according to the EIA with that share declining. However, the coal industry's incumbency is powerful and boosted by a more sympathetic Trump White House, pointing to a much slower decline in the US when compared to the UK or Germany.
A recent report by a coalition of environmentalist groups found that $1.9-trillion has been released by 33 global banks to oil, gas and coal companies since the Paris climate agreement was signed in 2015.
The full report from Energy Innovation is available to read online.
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