Local wind and solar could replace approximately 74% of the U.S. coal fleet at an immediate savings to customers. By 2025, this number grows to 86% of the coal fleet. That’s according to a new study by Vibrant Clean Energy (VCE) and Energy Innovation Policy & Technology LLC.
The research says that 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%. By 2025, substantially at-risk coal increases to 140 GW – almost half the U.S. fleet – even as federal renewable energy tax credits phase out. Given uncertainties in publicly available coal cost data, the tier of coal plants “substantially at risk” could, with high confidence, be replaced with renewable energy at an immediate cost savings, the study suggests.
The VCE dataset reveals the going-forward costs for the vast majority of coal plants fall between $33 – 111 / megawatt-hours (MWh). Costs in 2018 for solar are more tightly clustered, between $28 – 52 / MWh, while wind costs vary more widely based on locational resource quality, falling between $13 – 88 / MWh, with a high number of very costly outliers in windless regions.
The crossover between new renewable and coal running costs is just one important part of shutting down existing coal plants – replacing coal plants with new wind and solar energy is much more complex in practice. The purpose of this report is to act as a conversation primer for stakeholders and policymakers where the math points to cheaper options that could replace coal plants at a savings to customers. Any decision on how to proceed will require further modeling of grid impacts and alternative sources of reliability services, as well as the possibility for even cheaper renewable replacements further away than the 35-mile maximum radius considered in the report.
The researchers say that, regardless, any coal plant failing the cost 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.
The study suggests 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.
Ultimately, this report begins 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.
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