As fuel and energy costs increase around the world and especially in the United States, the pursuit for renewable energy resources has become even more pressing than before. One of the major longstanding barriers to this transition has been a financial one, with fossil fuel companies expressing concern that disabling all of their plants and switching to renewables would be too expensive. However, based on current economic trends, the opposite is in the fact the case.
According to an Energy Innovation report, it is now more expensive to continue running coal plants in the United States than it would be to construct and operate an entirely new solar or wind farm in the same region. Thanks in large part to the passage of the Inflation Reduction Act, renewable energy sources are now the economically optimal move to make.
“Coal is unequivocally more expensive than wind and solar resources, it’s just no longer cost competitive with renewables,” said Michelle Solomon, a policy analyst at Energy Innovation. “This report certainly challenges the narrative that coal is here to stay.”
Fossil fuel advocates have said that it isn’t safe or viable to immediately switch over to renewables and retire coal, as some regions may not yet have the infrastructure to support such systems. This, in turn, would pass a financial burden onto consumers. Analysts have conceded that we cannot have an immediate switchover, but if ever there were a time to begin a gradual transition, it would be now.
US renewable energy farms outstrip 99% of coal plants economically – study https://t.co/wy2sxNfJCi
— Guardian news (@guardiannews) January 30, 2023
“We can’t shutter all these plants tomorrow, we need to do it in an orderly fashion to support grid reliability but we should be able to do it in fairly fast order,” James Stock, an economist at Harvard University, told The Guardian. “Coal has been on a natural decline due to economics and those economics are going to continue, this is a transition that’s just going to happen.
“We built a lot of coal plants in the US around 50 years ago because we were worried about energy security in the world. That made sense at the time and they made an important contribution. But we know a lot more now about climate change, so now we need to make different decisions.”