Business View Magazine | December 2019

241 BUSINESS VIEW MAGAZINE DECEMBER 2019 Relative Cost of Renewable Energy vs. Coal According to a recent report conducted by researchers at Energy Innovation and Vibrant Clean Energy (VCE), the total costs associated with operating and maintaining existing coal-fired power plants is now higher than the total cost to develop and operate a new solar or wind energy project. This is primarily due to the recent declines in the cost of various technology associated with renewable forms of energy. The report refers to this shift as the “cost crossover.” This conclusion was reached by comparing the marginal cost of energy (MCOE) for each coal plant with the levelized cost of energy (LCOE) of solar and wind resources which are local (within 35 miles) to that coal plant. Based on this conservative analysis: • In 2018, local solar and wind resources could produce an equal amount of electricity at a lower cost than 74% of coal plants in the US. This number is projected to increase to nearly 100% by 2025. • A smaller but still significant percentage of the coal plants in the US are local to new solar and wind resources that can replace the total output of the coal plant at an all-in cost that is 25% lower than the existing coal plant’s marginal costs. • Average energy costs as of 2018: • Going forward costs of existing coal plants: $33-$111/megawatt-hour (MWh) • Solar: $28-$52/MWh • Wind: $13-$88/MWh In addition to being less expensive, building renewable resources in the immediate vicinity of coal plants means that the wind and solar projects “could replace local jobs, expand the tax base, reuse existing transmission, and locate in the same utility service territory.” We will likely be seeing a steady retirement of coal plants across the country. For example, based on their own economic analysis, the Indiana utility NIPSCO is planning to replace all of their coal plants with renewable energy resources in the next decade. Advocates of coal have pushed back against these facts by arguing that the grid cannot run reliably without the coal power plants. However, several studies, including one by the National Renewable Energy Laboratory (NREL) have found this to be false. Shifting from coal to renewable forms of energy, such as solar and wind, is clearly the only economical decision. It also benefits individual consumers by reducing electricity prices and reducing pollution. The data, as well as the majority of Americans supports this conclusion. PARTNER ENGINEER ING AND SC I ENCE , INC .