The quest for a complete transition to renewables is not simply a matter of efficiency. It is also a serious financial consideration. According to a recent study, renewable energy is now significantly undercutting coal.
To get this insight, the analysis team of Energy Innovation conducted a comparison between the operational and maintenance cost of a coal plant and the cost of building new solar. The result indicates that solar or wind resources are cheaper than coal.
Specifically, a US coal plant produces 1 megawatt-hour of power at $36 while solar panels can generate the same amount of energy at $24. The findings have also proved that the Inflation Reduction Act signed by President Biden in August 2022 promotes investment in cleaner energy.
Renewable energy is expanding, and the global market is hastening the shift to low-carbon energy sources by improving technologies to enhance output while decreasing production costs.
Previously, the Intergovernmental Panel on Climate Change (IPCC) warned that if large-scale emissions reductions are not implemented, global temperatures will rise within the next 20 years. To limit this, the world has called for a reduction in coal use.
Western countries are increasingly transitioning away from coal energy and toward renewables and gas. Meanwhile, the US has no plans to develop new coal-fired power facilities. With the cost of wind power falling and the cost of solar power rising, coal power is no longer the cheapest source of energy in major markets.
However, due to the energy crisis, which has been exacerbated by political complexity, gas prices have risen. Many countries restarted coal facilities, raising concerns about the environmental consequences. The US President’s Act caused confusion and controversy in an unstable environment. The transition away from coal-fired power plants is a long-term process.
“We can’t just snap our fingers and retire all coal plants but we need to accelerate the buildout of wind and solar so that when the time comes we can wean ourselves off coal,” Michelle Solomon, a policy analyst at Energy Innovation, stressed in his report.