It's Cheaper to Replace US Coal Plants With Solar and Wind

If we replaced all of the coal power plants in the United States with renewable energy projects, we could reduce our carbon emissions and require less water. This would be a huge step in combating climate change and protecting our environment.

Adding this item to the list would also save money.

A new report from the San Francisco-based climate think tank Energy Innovation has found that nearly all existing US coal plants are more expensive to operate than the cost of replacing them with new wind or solar projects.

This finding is consistent with previous research by BloombergNEF, which found that building new solar and wind farms is cheaper than operating existing coal or gas power plants in much of the world.

President Joe Biden's climate legislation is critical to the cost advantage of renewable energy in the United States. The legislation provides billions of dollars in incentives for clean energy infrastructure, making it more affordable for businesses and consumers.

"The Inflation Reduction Act has made it economically feasible and much cheaper to replace and reinvest in local coal communities," said Michelle Solomon, a policy analyst at Energy Innovation and the lead author of the report. "This creates a big opportunity to diversify the economics in coal communities."

The law includes a 10% tax credit for communities transitioning to clean energy infrastructure, including areas with retired coal plants. This will help these communities make the switch to cleaner, more sustainable energy sources.

The report authors calculated the costs of operating each of 210 coal plants in the United States, taking into account fuel and operations as well as future maintenance expenditures. They then compared those numbers to costs associated with installing and operating new wind and solar projects nearby. In all but one case, the renewable project required less cash.

Energy Innovation has found that the cost of producing energy from renewable sources is cheaper than running coal-fired power plants in the United States. In its 2019 Coal Cost Crossover report, the think tank found that 62 percent of existing coal capacity in the US cost more than producing the same amount of energy from renewable sources. That figure increased to 72 percent in the 2021 edition.

Now, incentives from the Inflation Reduction Act have made coal power more expensive, and it now makes up 99% of the total cost of power.

The White House's plans to move the US away from fossil fuels has been criticized by industry groups and some members of Congress. Senator Joe Manchin of West Virginia has argued that the plans will strip jobs from communities that need them.

Even though renewables cost less in the long run, replacing coal plants would require a lot of upfront investment. According to the study authors, this would create economic opportunity. Mike O'Boyle, one of the authors of the report and a director at Energy Innovation, says he hopes the new research will encourage public utilities commissions to invest in renewable energy.

"Regulators are key players in the energy transition," said O'Boyle. "With the right tools, they can take a proactive role in shaping the future of energy."