New Study Reveals Fossil Fuels To Be Now Costlier Than Renewables
Electricity from fossil fuel has currently become more expensive than renewables and nearly 75% of the production of coal in the US is now costlier than solar and wind energy considering the supply of electricity to American households, as per the new study.
“Even without major policy shift we will continue to see coal retire pretty rapidly,” said Mike O’Boyle, the co-author of the report for Energy Innovation, a renewables analysis firm. “Our analysis shows that we can move a lot faster to replace coal with wind and solar. The fact that so much coal could be retired right now shows we are off the pace.”
To work out the energy cost from coal plants in comparison to wind and solar options within a 35-mile radius, data from the Energy Information Agency (EIA) and the public financial filings put to use by the authors of the study. The research found that current US coal capacity is 211 gigawatts and 74% of the coal fleet that is supplying electricity is pricier than solar or wind.
The picture will be much clearer by 2025 when almost whole coal system of US will be outcompeted by wind and solar in terms of cost even in case of factoring in the new solar panels and wind turbines construction.
“We’ve seen we are at the ‘coal crossover’ point in many parts of the country but this is actually more widespread than previously thought,” O’Boyle said. “There is a huge potential for wind and solar to replace coal, while saving people money.”
The maintenance costs of coal plants including the requisites for the installation of pollution controls have raised a lot. Whereas due to improved technology, the price of solar and wind energy has plummeted. Besides, natural gas which is cheap and abundant with other growing renewables has hit coal demand as EIA reported in January and half of the entire coalmines in the US have shut down over the past decade.
“Coal is on its way out,” said Curtis Morgan, the chief executive of Vistra Energy, a major Texas-based coal plant owner. “More and more plants are being retired.”
The rise of renewables highlighted in the data released last week, and it showed the generation of electricity from clean sources became double since 2008. Although wind and hydro are playing a dominant role in the renewable energy sector, the role played by solar energy is minor yet growing.
Around17% of the electricity generation in the US is currently covered by renewables, and there is a clear decline in the share of coal. However, Trump administration being sympathetic towards coal’s incumbency and supporting it outright, and it seems coal is yet to be on track to get eliminated in the US than in the UK and Germany.
Fossil fuels are still steadily receiving institutional support. A coalition of environmental group’s report discovered that 33 global banks financed $1.9tn in coal, oil and gas companies even after the Paris Agreement 2015.
Considering the figures released last week, EIA predicted showing that carbon dioxide emissions from energy in the US would be the same as the current levels until 2050, with a decrease in the coal consumption but it will level off beyond 2020.
In such case, the effect of climate change will be disastrous, causing vast areas of the US coastline to be inundated, the growth of destructive wildfires, the spread of deadly heat waves, and food and water insecurity. However, experts argue that renewable transition will be more rapid and compatible with devastating climate change.
The Trump administration not only ignored warnings of scientists over these dangers, instead opened up vast tracts of federal land and waters for oil and gas drilling applying “energy dominance” policy.
The Energy Innovation report suggesting a “smooth shut down” of aging coal plants is significant because states and territories started to follow California and Hawaii’s lead in their commitment to 100% renewable energy.
While the recent decision of lawmakers in New Mexico is to follow suit, Puerto Rico poised to vote on the issue this week as states and territories strive to address climate change in lieu of the federal government.
“It would be better if we had a federal cohesive policy because not all states will take the initiative,” said O’Boyle. “In order to get an affordable, clean energy system we need both federal and state actors involved.”