74% of coal power more expensive than wind/solar

From Inside Climate News:

New Wind and Solar Power Is Cheaper Than Existing Coal in Much of the U.S..

Coal-fired power plants in the Southeast and Ohio Valley stand out. In all, 74% of coal plants cost more to run than building new wind or solar, analysts found.

Not a single coal-fired power plant along the Ohio River will be able to compete on price with new wind and solar power by 2025, according to a new report by energy analysts.

The same is true for every coal plant in a swath of the South that includes the Carolinas, Georgia, Alabama and Mississippi. They're part of the 86 percent of coal plants nationwide that are projected to be on the losing end of this cost comparison, the analysis found.

The findings are part of a report issued Monday by Energy Innovation and Vibrant Clean Energy that shows where the shifting economics of electricity generation may force utilities and regulators to ask difficult questions about what to do with assets that are losing their value.

The report takes a point that has been well-established by other studies—that coal power, in addition to contributing to air pollution and climate change, is often a money-loser—and shows how it applies at the state level and plant level when compared with local wind and solar power capacity.

Nearly three-fourths of the country's coal-fired power plants already cost more to operate than if wind and solar power were built in the same areas to replace them, the report says.

By 2025, with the costs of building wind and solar power expected to continue to decline, the analysts project that 86 percent of coal-fired power plants will be more expensive than local renewable energy. Notably, the 2025 wind and solar estimates assume that expiring federal tax credits will not be extended, so any price advantage is without federal credits.

In parts of the country where power plants compete on open markets, such as most of Texas, companies may be more quick to shut down money-losing plants because plant owners are the ones bearing the losses.

It's different in places where plants are fully regulated, as plant owners can pass extra costs on to consumers.

The Southeast, which is almost entirely regulated markets, has some of the costliest coal plants and is rich with solar resources.

"Consumer advocates and regulators there should be asking harder questions about integrating renewables," said Eric Gimon, an energy analyst and co-author of the report.

[Read more here]

Coupla points. 


First, the study compares the total cost of new wind or solar with the operating cost of existing fully paid off and depreciated coal power stations.  It gets very hard to justify running a coal power station when its running costs exceed the all-in costs of a brand-new wind or solar farm.

Second, the analysis assumed that the new renewables replacements would be located close to where the existing coal plant is—within 35 miles (60 km) of where the current coal-fired power station is.  In other words, the wind and solar farms aren't sited in any specially suitable area with good wind or solar resources.  Utilities could get lower costs by locating new renewables facilities further away.

Third, the cost of the storage required to "firm" the output of renewables is not included:

In this analysis, wind and solar replace all coal-fired generation solely on an annual basis, but as previously stated, a limitation of this analysis is that replacing annual generation does not capture coal generation dispatch timing. Despite its notorious inflexibility, coal is mostly dispatchable, while wind and solar are variable sources of energy whose output, even in aggregate, does not necessarily match demand. But so-called “baseload” coal economics typically require high capacity factors, limiting their use as flexibility resources (high capacity factors require avoiding frequent ramping up and down) and creating a premium for what flexibility they offer, as consumers must pay the costs of running higher-cost energy sources year-round to access that flexibility. 

The wider the gap becomes between the marginal economics of coal versus wind and solar, the more coal plants will have to depend on their perceived capacity value to recover costs. Their capacity factors may drop even more, widening the gap, and opening a window for dedicated resources like demand response, storage, and existing flexible resources to fill their niche.  

[Read more here]

As storage costs fall, this will become less of a restriction.  In the wind corridor, and in the SW where solar resources are good, new renewables with storage are already cheaper than the marginal cost of old coal.  And, as in the USA, so the rest of the world too.