Full cost of coal is a third to half a Trillion annually in the US, Harvard study finds. Plus wind power in the US is now half the price of existing coal plants

Editor’s note – this is an old study but still very relevant. The health costs are much more extensive than previously understood and coal is now known to not be reliable or cheap either.

Coal is only considered cheap because coal plants do not have to pay for the full social and environmental costs of coal burning on people’s health, the natural environment, and our climate. These costs, known as “externalities”, would double or triple the price of electricity from coal according to a Harvard University study, making renewables much cheaper. In China, mortality from air pollution is now valued at 10% of GDP. A 2015 IMF assessment put global fossil fuel subsidies at $5.3 trillion annually, which includes the costs of managing the environmental and health impacts of coal.

Even without factoring in these externalities, the price of renewables is becoming increasingly competitive with coal. Wind power is now cheaper than coal in many markets; in the United States it’s now half the price of existing coal plants. In India, the cost of solar and wind is already cheaper than building coal plants using imported coal. And a modern coal plant using advanced pollution controls produces electricity at around 9-10 cents/kilowatt hour, making it more expensive than many other options. (New onshore wind was 1.5 cents per kilowatt hour on average in 2018 in bids conducted by Xcel. That means half the bids were lower; some bids were 1.1 cents per kilowatt hour,)

Even though the coal industry likes to talk about “clean coal”, it works to prevent pollution standards being adopted at the national level precisely because it makes coal more expensive than other options. Building coal plants today locks in a reliance on this dirty fuel for 40 to 50 years. Coal prices are volatile and unpredictable: once constructed, a plant will have limited options over the next 40 to 50 years for sourcing and transporting its coal requirements, reducing flexibility and exposing it to significant coal price risks. Moreover, recent data is showing that coal plants are being less and less utilised as cheaper options come online, with coal plants in China being utilised less than 50% of the time. As a result, researchers estimate that if all the coal plants in the pipeline today were built, this could result in up to $981 billion in stranded assets.

Harvard Study:

Half a trillion dollars is a large amount and this Harvard study is a conservative estimate of the true costs of coal. “The impacts found are damages due to climate change; public health damages from NOx, SO2, PM2.5, and mercury emissions; fatalities of members of the public due to rail accidents during coal transport; the public health burden in Appalachia associated with coal mining; government subsidies; and lost value of abandoned mine lands.” We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually. Many of these so-called externalities are, moreover, cumulative. Accounting for the damages conservatively doubles to triples the price of electricity from coal per kWh generated, making wind, solar, and other forms of non fossil fuel power generation, along with investments in efficiency and electricity conservation methods, economically competitive. We focus on Appalachia, though coal is mined in other regions of the United States and is burned throughout the world. www.chge.hsph.harvard.edu/files/chge/files/MiningCoalMountingCosts.pdf

Recommendations

Local:

Alternative industrial and farming policies for coal-field regions.
Manufacture and install solar, wind and small-scale hydro.
Manufacture technologies for efficient, self-regulating “smart” grids.
Complementary inter-regional development (e.g., with the Rust Belt).
End mountain top removal (MTR) mining.
Reclaim all MTR sites and abandoned mine lands.
Meet water quality standards.

National:

Electric vehicles, plugged into cleanly-powered smart grids, and healthy cities programs, with cities connected by light rail.
Realign federal and state regulations and incentives to stimulate manufacture of and markets for clean and efficient energy systems.

February 17th, 2011 by Tim Tyler

A 2011 study published in the Annals of the New York Academy of Sciences authored by Dr. Paul Epstein, the Director of Harvard Medical School Center for Health and the Global Environment, and eleven other co-authors complied a first of its kind “Full Cost Accounting for the Life Cycle of Coal,” tracking the multiple human health and environmental impacts of coal from mining to transport to combustion in coal power plants, and the waste stream that accompanies it.

So, what did they find?

The Harvard paper estimates that “the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually.” This study lays out in detail the costs the coal industry is NOT PAYING and what everyone else IS PAYING! The paper details all the factors that are not quantifiable, like lost work time when a mother has to take her child to the doctor for an asthma attack or the cost to a family for the loss of a loved one or wage earner.

The paper finds:

Each stage in the life cycle of coal—extraction, transport, processing, and combustion—generates a waste stream and carries multiple hazards for health and the environment. These costs are external to the coal industry and thus are often considered as “externalities.” We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually. Many of these so-called externalities are, moreover, cumulative. Accounting for the damages conservatively doubles to triples the price of electricity from coal per kWh generated, making wind, solar, and other forms of non fossil fuel power generation, along with investments in efficiency and electricity conservation methods, economically competitive. We focus on Appalachia, though coal is mined in other regions of the United States and is burned throughout the world.

Half a trillion dollars is a large amount and this Harvard study is a conservative estimate of the true costs of coal. “The impacts found are damages due to climate change; public health damages from NOx, SO2, PM2.5, and mercury emissions; fatalities of members of the public due to rail accidents during coal transport; the public health burden in Appalachia associated with coal mining; government subsidies; and lost value of abandoned mine lands.”

This study sets a new benchmark for a discussion of energy choices in this country. In addition to the lump sum costs, the paper breaks down what these ‘external’ costs borne by society would add to the cost of coal fired electricity, which would be roughly 9 –27 cents per kilowatt hour. Of course this will be argued by Big Coal as false information and they will probably run a few commercials telling everyone how clean, cheap and abundant coal is in the United States. That doesn’t change the facts, though.

** March 2019 Energy News US

New wind, solar cheaper than operating most existing coal plants

BY Kathiann M. KowalskiMarch 25, 2019

The Avon Lake power plant sits on the shore of Lake Erie in Ohio.

In Ohio, though, legal and regulatory barriers prevent renewables from capitalizing on their economic advantage.

Locally generated solar and wind energy could already replace almost three-fourths of electricity made by U.S. coal plants for less than the cost of continuing to operate those plants, according to an analysis released today by two clean energy research groups.

By 2025, the share of “at risk” coal generation will jump from 74 percent to 86 percent, adds the report by Energy Innovation Policy & Technology in San Francisco and Boulder-based Vibrant Clean Energy.

“We’re not talking about replacing every coal plant overnight,” said report co-author Eric Gimon at Energy Innovation. “What we’re saying is every coal plant should be looked at.”

How do coal plants compare to solar or wind energy in the analysis?

“Very often, even if I gave you that power plant for free, you’d be better off getting somebody to build you a wind or solar farm to replace that energy,” Gimon said.

Why do those figures matter?

The country is already undergoing a crossover in costs between renewables and coal-powered electricity. “Regulators need to start thinking now about how to start replacing all that coal generation,” said report co-author Mike O’Boyle at Energy Innovation. “And policymakers need to start thinking now about transitions for communities that are going to be affected by that pretty rapid transition.”

What costs does the report compare?

Energy Innovation Policy & Technology/Vibrant Clean Energy

A map from the “Coal Cost Crossover” report shows the cost of existing coal-fired power plants compared with building new wind or solar within 35 miles (2018). (click to enlarge)

Energy Innovation Policy & Technology/Vibrant Clean Energy

A map from the “Coal Cost Crossover” report shows the cost of existing coal-fired power plants compared with building new wind or solar within 35 miles (2025). (click to enlarge)

The research team compared the marginal costs for existing U.S. coal plants as of 2018 and 2025 with the levelized cost of energy for new solar or wind facilities that might be built within 35 miles of each location.

Marginal costs for a coal plant are the extra expense to make an additional unit of electricity. The levelized cost of entry is the projected per-unit cost for a wind or solar facility over its lifetime, including both capital and operating costs.

How much of Ohio’s coal generation will have trouble competing with renewables in 2025, compared to now?

The report forecasts more than a ninefold jump in the amount of Ohio coal generation whose future costs would be at least 25 percent higher than new solar or wind energy — from 709 MW in 2018 to 6,772 MW in 2025.

Which state will have the most coal generation at risk from renewable energy competition?

Indiana will have the most coal generation with marginal costs at least 25 percent more than renewables, with more than 11,500 MW of current coal generation likely unable to compete with solar or wind energy by 2025.

Among other Midwestern states, Wisconsin, Michigan and Illinois will have a combined total of more than 20,000 MW of current coal generation that could face significant price competition from renewables by 2025.

What numbers did the researchers use for their analysis?

The researchers calculated coal plants’ marginal costs using publicly available databases. Numbers used to determine the levelized cost of energy for wind or solar energy came from datasets from the National Oceanic and Atmospheric Administration, satellite data, materials from the National Renewable Energy Laboratory and other information. The analysis adjusted renewables’ costs to reflect those resources’ projected availability.

Were any costs for coal plants left out of the analysis?

The report only considered marginal costs for coal plants, not their overhead costs or debt service for capital improvements. Those omissions actually make coal look more favorable than it really is, O’Boyle said.

Were any benefits for coal plants left out?

The report didn’t add in any value for the timing of when coal plant generation might be available, versus wind or solar energy. Most coal plants “aren’t that responsive anyway,” Gimon said. “So it’s less of a feature than for a gas plant.”

On the flip side, solar facilities generally produce their highest levels of electricity during the summer when demand is high, he noted. Energy storage could also smooth out the variability of renewable resources. And costs for that or other grid services could be offset if cheaper renewable energy was brought in from facilities farther than 35 miles away. Transporting electricity for long distances is fairly standard for Ohio and elsewhere in the PJM territory, as well as other parts of the country.

If coal plants are such a bad deal, why aren’t utilities and other companies just closing them?

In Ohio, it’s partly because regulators have allowed utilities to pass the costs of some uneconomic coal plants on to customers.

In 2011, for example, American Electric Power, FirstEnergy, Dayton Power & Light and Duke Energy extended their obligations to buy electricity from two 1950s-era coal plants, known as the OVEC plants. The Public Utilities Commission of Ohio approved rate plans for AEP, Duke Energy and DP&L’s utilities that let them pass those costs on to all their customers, regardless of whom they chose as their energy supplier.

FirstEnergy’s plan doesn’t have an express pass-through for those two OVEC plants. However its utilities collect an unrestricted credit support rider, which is on appeal. Plus, the bankruptcy proceedings for FirstEnergy’s generation subsidiary could let the parent company avoid its share of those plants’ costs — possibly at other utility consumers’ expense.

But if solar or wind generation is such a good deal, why aren’t utilities building that and passing the costs through to customers?

That depends in large part on state law and politics. Since 1999, Ohio law has called for generation to be a competitive market, separate from distribution.

AEP has proposed using an exception to that law to build 400 MW of solar generation in Appalachian Ohio, which it agreed to do under a partial settlement agreement that led to customer charges for the two OVEC coal plants. The Public Utilities Commission has not yet decided the case.

What about other companies building more renewable facilities in Ohio?

Companies are building solar and wind energy projects in the state. However, ongoing uncertainty over Ohio’s renewable energy standards, regulatory provisions and other policy matters has complicated investors’ analysis of whether to back projects in Ohio versus other states with policies that may be more receptive to clean energy.

Also, in the case of wind, a 2014 law that tripled property line setbacks for commercial wind farm turbines has substantially cut back on most new wind energy in the state that might have been built under the prior law. Efforts to reform the 2014 law have so far been stymied.

Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.