Climate bargain of all time: US could close coal for just $3 a tonne

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Phasing out coal can be done at relatively modest cost, and could be the greatest climate bargain of all time.

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If you are serious about cutting carbon emissions, an obvious place to start is shutting down polluting coal-fired power plants.

We know where they are, how many there are, who owns and operates them, and how much carbon they emit. And it goes without saying that you would want to start with the oldest, most inefficient and polluting ones first.

In many countries, US among them, this can be done relatively easily, fairly inexpensively, and the lights will most likely not go out.

That is the central message of a report by the Rocky Mountain Institute (RMI), released in mid October that says the next US administration – there is no hope for the current one – has the chance to strike the greatest climate bargain of all time.

It claims that this can be done for less than $3/ton of CO2 abated by simply retiring the nation’s remaining coal-fired plants while saving US consumers billions in reduced pollution and associated health care costs.

Phase out the coal

 

According to the RMI, at the end of 2018, US utilities had an estimated $170 billion tied up in the 231 remaining coal plants. Because new solar and wind are so much cheaper, even without federal tax credits, RMI estimates that one-third of these plants could be replaced with clean energy at negative net cost.

The remaining $115 billion worth of coal plants could be retired and replaced with a net subsidy of about 30% of their remaining value.

The bottom line of the RMI analysis is this: retiring the entire US coal fleet today would cost $35-40 billion, less than one year’s worth of fuel cost to run America’s coal and gas plants.

Closing these coal plants an average of 10 years early would eliminate 12 billion tons of CO2 at a cost of $3 per ton, what RMI calls a real bargain.

Most of the remaining coal plants, according to RMI, “… are owned by monopoly utilities that face no direct competition and have no real incentive to abandon them.

Regulators and governments authorized these utilities to invest the $125 billion they have tied up in coal assets, so their customers are ultimately on the hook to repay them – with a financial return to boot.”

 As problems go, the US coal phase-out seems like an easy one to solve. Eventually, the same has to be done everywhere (visual).

See also: Analysis: Global coal power set for record fall in 2019

And: Renewable generation in U.S. is set to surpass coal in 2021 for first time

Fereidoon Sioshansi is the editor of EEnergy Iinforma. Reproduced with permission.

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