Coal’s cost is its own biggest enemy

Science : Since 2008, the amount of electricity generated by coal power plants in the US has dropped from 50% to 38%. More than 150 planned coal plant projects have been canceled since the mid 2000s. Only one new plant went on line in 2012. David Schlissel of the Institute for Energy Economics and Financial Analysis in Belmont, Massachusetts, has found that it’s the economics of the coal power industry that’s driving this precipitous drop. Construction and maintenance costs have increased rapidly. The plant that opened in 2012 was projected to cost $1.8 billion, but cost $4.9 billion by the time it was completed. And 60% of existing plants are more than 40 years old, so repairs and upgrades to make the plants more environmentally friendly often require extra work. Perhaps even more significant, however, is that the price of natural gas has dropped so much that companies that run coal plants have had to lower the price they charge for the electricity they generate. The result has been a drop in profits from $20 billion to just $4 billion from 2008 to 2011. Add in the rising cost of shipping coal and it’s clear, from an economic standpoint, that coal is no longer the best option for power generation.