America has officially entered the “coal cost crossover,” according to a new report from Energy Innovation, a renewables analysis firm. According to the researchers, this crossover effect is where existing coal is increasingly more costly than cleaner energy alternatives.
Results show that the country’s current wind and solar resources could replace about 74% of the U.S. coal fleet at an immediate savings to customers. By 2025, this number grows to 86% of the coal fleet.
The study used public financial filings and data from the Energy Information Agency (EIA) to figure out the cost of energy from coal plants compared with wind and solar options — within a 35-mile of the existing coal plant.
This analysis complements existing research into the costs of clean energy undercutting coal costs, by focusing on which relatively nearby coal plants could be replaced locally at a saving.
“Due to the rapid recent cost decline of wind and solar, the combined fuel, maintenance, and other going-forward costs of coal-fired power from many existing coal plants is now more expensive than the all-in costs of new wind or solar projects,” states the report.
The researchers suggest that local decision-makers should consider plans for a smooth shut-down of these old plants — assessing their options for reliable replacement of that electricity, as well as financial options for communities dependent on those plants.
This report should begin a longer conversation about the most cost-effective replacement for coal, which may include combinations of local or remote wind, solar, transmission, storage, and demand response. And that may already be the trend. A recent EIA report found that renewables provided just under 18% of electricity generation in the U.S. in 2018. What’s more: nearly 90% of that increase in renewable electricity between 2008 and 2018 came from wind and solar generation.
It may only be a matter of time before renewables outpace coal.
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