A recent report from Energy Innovation makes the case that, in many areas of the country, the economic forecast points to a coal-cost crossover – where the costs of new local wind and solar resources are less than ongoing coal plant operation. According to the report, this assessment is valid even as federal tax credits phase out.
According to the report, “in 2018, 211 gigawatts [(GW)] of existing U.S. coal capacity, or 74 percent of the national fleet, was at risk from local wind or solar that could provide the same amount of electricity more cheaply.”
What does “more cheaply” mean in this context? The report states, “in 2018, 94 GW of existing U.S. coal capacity was deemed substantially at risk from new local wind and solar that could undercut ongoing costs of existing coal by at least 25 percent” – and the cost for renewables continues to fall.
Twenty-five percent cost savings for producing electricity is a substantial savings, and the report presents evidence that the “coal crossover test should be a wake-up call for policymakers and local stakeholders that an opportunity for productive change exists in the immediate vicinity of that plant.”
What does that mean for companies, universities, and organizations with an existing coal-fired power or steam-generating plant? It is no longer enough to consider alternate sources when it is time to upgrade or replace an existing plant; the cost crossover of converting to wind and solar may spur moving away from coal, well before the useful life of an existing coal-fired plant expires.
We cannot begin to distill the entire report in this space, but it is becoming clear that wind and solar are viable (and cost effective) alternatives to coal plants in many areas of the country. We encourage anyone involved with coal-fired plants to read the full report (click here), study the maps, and talk with an expert design-build firm like Greenland to determine if, and when, an alternative is a viable option for your facility.