Economic concerns, rather than environmental or regulatory, may be the key factor in replacing coal-generated electricity with renewable, clean energies. A recent analysis conducted by Energy Innovation, a non-partisan firm, revealed that 74% of U.S. coal production is now more expensive than the all-in building and production costs of wind and solar power.
According to the analysis, this number is expected to rise to 86% by 2025, as the cost of solar and wind energy continue to outcompete coal systems. The cost crossover detailed in the report, titled “The Coal Cost Crossover,” calls to question “regulators and utilities as to why these coal plants should keep running instead of new renewable power plants.”
In addition to the declining costs of clean-energy competitors, the operating expenses of coal plants are no longer sustainable in many cases. Expenses include maintenance and the installation of pollution controls. Currently, the operational costs of existing plants in North Carolina are 25% more than the cost of building a solar or wind plant. Many plants closed their doors in 2018, and at least 20 plants are expected to close down this year.
The states with the most at-risk coal plants are North Carolina, Florida, Georgia, and Texas. By 2025, Indiana, Michigan, Ohio, and Wisconsin are expected to be added to the list of at-risk plants. Unfortunately for many of these regions, coal plants remain a major employer and the closure of plants could have damaging effects on local economies.
Efforts to revive the coal industry by the Trump Administration may have been “too little, too late,” according to Mike O’Boyle, the director of electricity policy at Energy Innovation. Even with rolled-back emissions regulations and a former coal lobbyist leading the EPA, the U.S. Energy Information Administration (EIA) reported that coal-fired power generation dropped to 28% last year (from 48% in 2008). It’s expected to continue to fall to 24% by next year.
On the other hand renewable electricity generation in the U.S. has doubled since 2008, accounting for 17% of electricity generation, according to EIA. This year, large-scale solar power is expected to increase by 10%. Wind power is expected to surpass production levels of hydropower for the first time.