A commonly cited argument in favor of burning coal to generate electricity says it is a cheap and effective way to do it. However, that is no longer true.
A third of the planet's coal plants are already more expensive to operate than building new renewable energy sources, along with improved battery storage solutions. That's according to a team of experts who have published a report on the rising costs of coal-based energy compared to renewables.
In five years, they explain, as the prices of renewable energy will continue to fall, up to 73% of the planet's coal fleet will be more expensive than the newly installed renewable energy. "Replacing the entire fleet of global coal plants with clean energy plus battery storage could be achieved with net annual savings as early as 2022," write energy experts from the Rocky Mountain Institute.
"The rapid decline in renewable energy costs brings annual net savings to $ 105 billion in 2025," they add. "All of this is before considering the serious health, climate and environmental effects of coal, or considering the social and environmental benefits of reducing pollutants."
A rapid phase-out of coal-fired power generation with a simultaneous transition to renewables is "within reach," emphasizes Paul Bodnar, managing director of the US-based think tank.
"Coal power is rapidly facing economic obsolescence regardless of carbon pricing and air pollution policies," says Matt Gray, managing director of the Carbon Tracker Initiative, a nonprofit organization based in the United States. United Kingdom. "Shutting down coal capacity and replacing it with lower-cost alternatives will not only save consumers and taxpayers money, but could also play an important role in the next economic recovery."
Renewables are rapidly gaining ground with coal in many developed countries, including the United States. This is especially the case right now, as the Covid-19 pandemic has reduced overall electricity demand, but solar and wind power production continues apace.
“With wind and solar power, once you have the solar farm or windmill set up, the incremental cost of running them is next to zero,” says Toby Shea, a senior loan officer at rating agency Moody’s Investors Service. “On the other hand, the cost of fuel associated with coal or gas generation is significant. So when the demand pie is reduced, coal and gas will recede, but solar and wind will continue to work. "