A new study estimates that 99% of coal plants nationwide are more expensive to run than replacing their generation capacity with either new solar or new wind.
“The economics are clear: Solar and wind offers much cheaper power compared to coal and without compromising the reliability of our electricity system,†Energy Innovation, the climate policy firm behind the report, said in a summary of its findings.
The report called for state legislatures and energy offices to plan and fund a coal community economic transition and urged regulators to require reassessment of any utility investment plans completed prior to the federal Inflation Reduction Act enacted in August.
The Inflation Reduction Act dedicated $369 billion in climate and green energy spending expected to hasten the energy transition away from coal.
West Virginia relies on coal-fired electric generation far more than any other state. Coal comprised 91% of the state’s electricity generation in 2021 — 16 percentage points more than the next-highest coal percentage, Missouri.
Public Service Commission spokeswoman Susan Small said in December the agency responsible for overseeing the state’s electric utilities was reviewing the Inflation Reduction Act to determine what opportunities there are for West Virginia.
In 2021, the PSC ordered Appalachian Power and Wheeling Power to operate their in-state coal-fired plants at a capacity factor of 69% or higher.
Capacity factor, or use rate, is the ratio of electrical energy produced by a generating unit for a given time to the electrical energy that could have been produced at full power during the same span.
The commission has contended that operating at higher capacity factors would lower costs recoverable from customers, encouraging self-generation over paying rising PJM market prices for purchased power. PJM is the regional transmission organization that oversees West Virginia and 12 other states.
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Critics of the PSC’s order say it places an uneconomic emphasis on coal-fired electricity.
Energy Innovation’s report flagged the PSC for its 2021 approval of environmental upgrades federally required to keep Appalachian Power and Wheeling Power coal-fired plants operating beyond this decade.
Replacing a portion of retired capacity at the Mitchell Power Station in Marshall County with a portion of Appalachian Power’s excess capacity in 2028 would result in savings to West Virginia customers of approximately $27 million annually from 2029 to 2040, Appalachian Power and Wheeling Power acknowledged in a December 2020 filing with the PSC.
Energy Innovation said in its new report that replacing the Mitchell plant with local solar and battery storage would be roughly 50% cheaper and provide the reliability the PSC seeks while saving ratepayers hundreds of dollars every year.
The firm predicts that replacing coal would save utilities $632 million annually, which could benefit consumers.
The cheapest renewable energy alternative is regional wind resources for most of West Virginia’s coal-fired plants, according to Energy Innovation’s analysis.
The percentages by which the cheapest renewables option is cheaper than coal costs are 48.4% for the Mitchell plant, 47.9% for the FirstEnergy-controlled Fort Martin Power Station in Monongalia County, 21% for the American Electric Power-controlled John E. Amos Plant in Putnam County, 16.6% for the FirstEnergy-controlled Harrison Power Station in Harrison County and 6.4% for the Mountaineer Plant in Mason County, per Energy Innovation.
The cheapest renewables option would be local solar for the Amos and Mountaineer plants, according to Energy Innovation’s analysis.
“The near-complete crossover of coal economics versus renewables makes the imperative to transition clearer than ever before, but policymakers, utilities, consumers, and coal-dependent communities must recognize the benefits and seize this moment,†the report concludes.
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