Federal clean energy tax credits are accelerating a nationwide wave of coal plant closures, as those facilities can no longer economically compete.
That’s driving a wave of state-level legislation and national rhetoric from the GOP aimed at keeping coal plants online.
But cost concerns — as much as those around climate — mean that the carbon-intensive fuel is entering a period of long decline in the United States, according to the report by the nonpartisan Institute for Energy Economics and Finance Analysis (IEEFA).
Americans can expect “an ongoing and deep restructuring of the U.S. coal industry as demand for the fuel continues to drop quickly,” IEEFA found.
Coal use by U.S. power plants in 2023 is likely to be just half of what it was a decade ago.
The report, issued Monday, found that 173 coal plants are set to close by 2030 — 54 percent of the current fleet — and another 54 by 2040.
Those findings echo ones offered last week by the U.S. Energy Information Agency, which noted that 2022 was the first year that renewable power generation exceeded that from coal, as The Hill reported.
Last week Utah-based utility Rocky Mountain Power announced it would shutter its last two coal plants by 2032, joining a growing list of derelict coal plants around the country.
Last year, for example, the W.H. Zimmer coal plant in Moscow, Ohio, closed because the Texas-based company that owned it could no longer compete on price, and Duke Energy announced it would close all its coal plants by 2035.
Local residents are also concerned about the planned closure of an East Texas coal plant — because its Ohio-based owners can’t justify the costs, according to Texas-based ABC-affiliate KLTV.
That matches campaign remarks made by President Biden last November, when he said, “We’re going to be shutting these plants down all across America and having wind and solar power.”
“[It is] cheaper to generate electricity from wind and solar than it is from coal and oil. Literally cheaper. Not a joke,” Biden added.
If anything, he understated the case. Last summer, the Democrats passed a flat 30 percent federal clean energy tax credit, which replaced a tangle of continually expiring ad hoc tax credits.
With that discount now available for any new wind or solar installation — and increased regulatory scrutiny of pollution and climate impacts from coal — the economics of coal increasingly don’t make sense, a series of recent reports by IEEFA and others have found.
The closures have spawned a Republican statehouse backlash across the Midwest reminiscent of Obama-era talk about the “War on Coal.”
In Indiana, for example, a state Senate bill would require power utilities to seek approval from the state oversight commission to close coal plants — and allow the commission to deny it, according to the Indiana Capital Chronicle.
Those concerns are generally framed around the reliability of competing renewables, which the GOP often argues are more likely to go offline.
“To close early just to be — maybe more carbon friendly when your plant has another five or 10 years — that’s probably what I’m trying to get at until we have better battery storage,” Indiana state senator Jean Leising (R) told the Capital Chronicle.
Similarly, the Texas GOP has blamed the state’s growing renewable energy sectors for disruptive blackouts in 2021 and 2023.
There is evidence that these concerns are obsolete: in both Texas and Germany, grid reliability has increased — and outages have decreased — in lockstep with the rise in renewables, according to Yale Environment 360.
With the federal tax credit, just one coal-fired power plant in the entire U.S. costs less to operate than it would to build new wind or solar, according to a January report by the think tank Energy Innovation. That plant is Dry Fork Station near Gillette, Wyo., a new coal plant that is both unusually energy efficient and right next to major coal fields.
Even with these, Dry Fork is “barely scraping by,” Michelle Solomon of Energy Innovation told Wyoming-based news outlet Buckrail.
That doesn’t mean that the plants are unprofitable for their owners. Often, they continue to make money through regulatory carve-outs, rates guaranteed by the legislature or by simply passing the added costs on to customers, Buckram noted.
While coal is expensive and the dirtiest fuel in terms of air quality and climate damage, there are economic viability reasons to be concerned about the closure.
Moscow, Ohio, where the plant closed last year, may cease to formally exist in May, in part because of the crash in tax revenues caused by losing its largest employer are driving calls to merge with nearby municipalities, according to Ohio-based ABC affiliate WCPO.
“The village has been here for over 200 years; there’s a lot of history here,” Moscow Mayor Tim Suter told WCPO. “There’s a lot of people upset. It would be very sad.”
The 173 coming coal plant closures will bring similar local-scale disruption to communities across 33 states, according to IEEFA.
Such disruption is one reason global groups like the United Nations and Organisation for Economic Co-operation and Development (OECD) have long argued that any “just transition” off fossil fuels must also offer public investment and new, well-paying jobs for the communities that produce them.
That transition must “respect the contribution that workers in fossil fuel industries have made to today’s prosperity,” a 2017 OECD report found.
If the rising gains from the clean energy boom are shared, these communities will benefit too, Simon Stiell, director of the U.N. Framework Convention on Climate Change, told energy leaders in Oslo in February.