There is growing alarm over the loss of America’s baseload sources of electricity. Coal and nuclear power plants are being pushed off the grid by a three-headed monster of heavily subsidized renewable energy, the legacy effects of overzealous regulation and a glut of natural gas.
Since 2010, more than 600 coal-fired generating units in 43 states have retired or announced plans to retire. Nearly 70 gigawatts of coal capacity already has been retired, and half of the nation’s commercial nuclear fleet is facing financial pressure.
The loss of so much baseload power – and its replacement with less reliable and often intermittent capacity – is cause for deep concern. The reliability and security of our electricity grid, the very foundation of our economy, is in jeopardy. But the unchecked erosion of baseload capacity also raises serious questions.
A new case study conducted by Energy Ventures Analysis examined the potential cost of early retirement for three coal plants operating in the PJM market – the nation’s largest electricity capacity region. It makes clear how expensive more premature retirements could be.
The study shows the cost of retiring these three at-risk plants would be 15 times higher than providing support to keep them on the grid. The cost in higher prices from premature retirement would exceed $2 billion a year. Conversely, the annual support needed to keep these plants on the grid would total only $130 million.
Inaction to preserve baseload power plants could push tens of billions of dollars in additional energy costs onto American consumers, while the reliability of the nation’s power grid deteriorates.
Although it’s important we understand the cost of inaction on consumers, we can’t lose sight of the fact that coal plants are our most resilient sources of power. Wind and solar power are intermittent sources of energy, meaning they generate power only when conditions are right. Nuclear power plants, while reliable, run full-out all the time.
During the bomb cyclone winter storm that raked the East Coast this past winter, half of the region’s natural gas plants couldn’t run because heating demand had swallowed gas supplies. Coal plants were far and away our largest source of resiliency when it mattered most.
As EVA’s study makes clear, the cost of not taking action to preserve our baseload coal power plants is far greater than providing them with needed support. The U.S. Department of Energy should act now.
Matthew Kandrach is president of Consumer Action for a Strong Economy.