New wind and solar power is cheaper than running costs of all but one coal plant in US - Inside Climate News (2023)

A coal-fired power plant near Gillette, Wyoming, is the only one nationwide in terms of economic viability, a positive distinction for this plant, but a detriment to coal-fired power in general.

With a generating capacity of 405 megawatts, the Dry Fork Station is the only coal-fired plant in the country that costs less to operate than it would cost to replace the plant's output with the construction of new wind or solar plants in the same communities or regions.a new reportpublished today by the think tank Energy Innovation.

The report follows previous editions from 2019 and 2021 which, taken together, show how the economics of coal power are deteriorating.Em 2019the authors found that more than 70 percent of coal-fired power plants were more expensive to operate than the alternative of building new wind or solar plants. That percentage has now grown to 99%, with only the Wyoming plant keeping it from reaching 100%.

The change is largely due to the inflation mitigation law signed in August, which includes various incentives that make wind and solar power cheaper.

"The trend of coal getting more expensive and renewable energy cheaper has definitely continued, but the IRA is certainly the big change here," said Michelle Solomon, a policy analyst at Energy Innovation and a co-author of the report.

Even with the recent rise in inflation, which has made nearly all energy sources more expensive, the costs of wind and solar power have continued to improve relative to other major sources.

However, the report's estimates do not mean that coal-fired plant owners will lose money if they continue to operate them. In fact, many of the plants are viable for a number of reasons, including government regulatory regimes that allow owners to pass all costs on to customers, and grid operator policies that allow companies to "plan for themselves." , which means that the systems work without problems when there are cheaper options on the net.

The bottom line is that consumers could save billions of dollars if power plant owners replaced the majority of their coal-fired power plants with a mix of wind and solar power.

The IRA also includes carbon sequestration incentives that some plant owners can use to install retrofits. The report authors did not consider the upgrades because, other than pilot projects, no plants have done so successfully and it is not yet clear whether such changes would work or how much they would cost.

The report does not attempt to quantify the climate and health benefits of coal plant closures.

Coal struggles to stay close

At the same time, advocates of the fossil fuel industry argue that coal and natural gas power plants have advantages that cannot be fully explained by cost, since power plants can run 24/7. of the week and, in the case of coal power plants, the fuel can be available for weeks or months if it is stored. This is in contrast to wind and solar systems, which rely on wind and sun.

However, the report authors say the potential for cost savings from coal plant closures is so great that companies can develop storage for wind, solar and energy in ways that compete with capacity 24/7, 7 days a week from coal and natural gas plants, and still save money.

The authors illustrate this point by showing that most coal-fired power plants are significantly more expensive than wind and solar power plants. About 80 percent of the coal-fired power plants in the report have operating costs that are at least a third higher than the cost of generating that electricity from new wind and solar power.

"Most power plants are far from this demarcation line," said Eric Gimon, principal investigator for energy innovation and a co-author of the report.

And that's important, he said, because it means the cost differences are large enough that the fundamentals are unlikely to change in the future due to fluctuations in the way estimates are made or small changes in costs.

The report examines 210 coal-fired power plants in the continental United States and uses publicly available data to estimate their costs, and compares those numbers to the costs of building and operating wind and solar power plants in the same regions as coal plants. coal power. floors. .

The findings speak to Emily Grubert, a professor of sustainable energy policy at Notre Dame, who was not involved with the report.

“This is a system that is struggling to stay close,” he said of the interconnected economies of power plants and coal mines.

One of the key points when comparing coal and renewables is that coal plants have to pay for fuel, which includes the cost of transportation. The fact that solar and wind turbines do not have to pay for fuel not only gives them an advantage because they have lower costs, but also more predictable costs because plant operators can expect decades of operation.

The authors did not compare the cost of building a new coal plant to that of renewable energy because construction of new coal plants in the United States has come to a near halt. Since 2014, the only new coal plant to come online was a17 megawatt power plant at the University of Alaska Fairbankswhich supplies the campus with electricity and heat.

Developers are responding to the competitiveness of other types of power plants, including renewables and natural gas, and the financial risks that federal or state governments could pass laws that make plants pay more for their emissions.

"badly ended"

dry fork station, which came online in 2011, was part of the latest wave of new coal plants. The plant, which cost $1.35 billion to build, is majority-owned by Basin Electric Power Cooperative, a company that sells electricity to cooperative farms in nine West Mountain and Midwest states.

At the time of its completion, the Forquilha Seca Station was characterized by its high efficiency in terms of the amount of electrical energy generated in relation to the amount of fuel consumed. Additionally, the facility is adjacent to the coal mine that supplies fuel, so there are almost no fuel transportation costs. These factors combine to make the plant economical to operate compared to others that run on coal.

"The Dry Fork station is part of our overall energy strategy to ensure affordable, reliable and responsible power for our members," a Basin Electric Power Cooperative spokesperson told Inside Climate News.

But despite its efficiency, the dry jib station is barely cheaper than the new renewable energy. The report estimates dry fork operating costs at $16.64 per megawatt-hour, while building and operating a new wind farm in the region would cost $16.96 per megawatt-hour, a difference of 2%.

"It barely shows up," Solomon said of the small difference.

Renewable energy cost estimates depend on the amount of sun and wind the area near a coal-fired power plant receives and other factors, including variations in the number of tax credits available in different locations.

Several other coal-fired power plants are nearly breaking even with renewable energy or, in the case of Illinois' Prairie State Generating Station, the cost is about the same. The Illinois facility, which came online in 2012, has operating costs of $20.47 per megawatt hour, which is the estimated cost of building and operating a new wind farm in the region.

But they are among the outliers. More common are cost gaps that are large enough that consumers question whether it makes sense for facilities to remain operational, Solomon said.