Renewable clean energy costs are getting cheaper to build and run, in fact, it is already the lowest-cost source of electricity in many parts of the world according to the UN International Renewable Energy Agency (IRENA). New technology is driving the prices down so much that it is now more cost-efficient to invest in renewable energy like solar or wind farms than coal-fed power plants; the cheapest fossil fuel option.
From the US to China, according to Fast Company, it is more cost-effective to build new renewable electrical power plants than to keep running 60 percent of the existing coal generating plants. A new report from the think tank Carbon Trackers estimates that by 2030, renewables will be less expensive to run than all existing coal plants.
Coal has been the most inexpensive fossil fuel option since the 1880s. By 1961, it was the main fuel used to generate electricity in the US because of availability and price. It is also the dirtiest. Even after the 1963 Clean Air Act and subsequent energy legislation called for coal pollution mitigation, it is still the case that cheap energy comes with a high environmental price tag.
“With our report, we aim to challenge the long-standing narrative that coal power is cheap and will continue to remain a cheap source of energy,” Durand D’souza, a data scientist at Carbon Tracker told Fast Company.
Despite the fact that the cost of building renewable power plants are now cheaper than building new coal plants, there are still new 499 gigawatts coal plants – to the tune of $638 Billion – under construction and even more are planned. This, the report says, is wasted money.
"Renewables are outcompeting coal around the world and proposed coal investments risk becoming stranded assets which could lock in high-cost coal power for decades," Matt Gray, Carbon Tracker co-head of power and utilities and co-author of the report, said in a statement.
"The market is driving the low-carbon energy transition but governments aren't listening. It makes economic sense for governments to cancel new coal projects immediately and progressively phase out existing plants," he said.
China, the world’s biggest coal producer, has the largest amount of new coal-fed plants under construction according to Carbon Tracker and 71 percent of its existing coal plants cost more to run than building new renewable plants. Coal plants in the EU, India, and the US also cost more to run than building solar or wind plants.
So far, the EU is the closest to making coal obsolete as countries are working on meeting their Paris agreement goals. In May 2019, Germany announced that it would close all of its remaining 84 coal-fired power plants by 2038. Now the economic incentive may encourage Germany to move up the date.
In the UK, renewable energy already produces more electricity than fossil fuels, By 2018, there were only six coal-fed plants left.
The Carbon Tracker report called on governments to deregulate coal and the market will soon make renewables much more attractive if they are on a level playing field.
Couple this with a report from IRENA that concluded that the share of coal generated electricity must fall to under two percent by 2050 for global warming to stay within 1.5 degrees Celsius. Now there is also a big economic incentive to switch to renewables.
