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Coal’s Last Gasp Is a Win-Win for the Economy and Public Health

Policy Analysis
Friday, November 2, 2018

For some time we’ve been calling the decline of the coal industry “a death spiral.” Now it’s more accurate to call it coal’s last gasp.

As recently as 2005, half of U.S. electricity came from coal-burning power plants. In 2017, the share of electricity from coal dipped below 30 percent – and it’s still falling fast. The Institute for Energy Economics and Financial Analysis projects that by the end of this year, a record 44 coal-burning units will have closed in 2018, with another 117 closures by 2025.

The primary cause of the death of coal is economic: Plants are expensive to build and operate, and can readily be replaced by cheaper renewable energy sources.

The latest, most striking evidence is the recent announcement by NIPSCO, an Indiana utility, that it will close all of its coal-burning plants over the next decade. By replacing those plants with wind turbines and solar panels, plus increasing energy efficiency and storing energy in batteries, NIPSCO will save its 468,000 customers more than $4 billion by 2035.

Generally, utilities have turned to natural gas to replace shutdown coal plants. But the Rocky Mountain Institute, or RMI, says this is a big mistake. In a 2018 study, RMI found that investments in wind, solar and efficiency instead of new natural gas plants would save hundreds of billions in fuel costs over the lifetime of the plants – costs that would otherwise be passed on to customers.

But the biggest economic benefit of replacing coal plants with renewables is not reflected in ratepayers’ monthly electric bills. It’s the huge savings that will come from Americans breathing cleaner air. By any measure, coal’s health care costs are enormous:

  • In 2011, a team of academic researchers published an article estimating the health and environmental costs of burning coal in the U.S. – over its entire life cycle, from production to disposal – to be up to more than $500 billion a year. They said accounting for those costs “conservatively doubles to triples the prices of electricity from coal from kWh [kilowatt-hours] generated, making wind, solar, and other forms of nonfossil fuel power generation . . . economically competitive.”
  • In 2013, a study by researchers at the Environmental Protection Agency found that the nation’s annual health costs related to burning coal ranged from more than $300 billion to nearly $900 billion. They found for coal, as well as for oil and natural gas, the cost of the health impacts was more than the typical cost of electricity for consumers.
  • A recently released study by a team of American, Chinese and Taiwanese academic researchers estimates that in 2015 the U.S. spent more than $650 billion in medical costs attributed to cardiovascular disease, much of the illness stemming from sulfur dioxide pollution from coal plants. The researchers found that more than 60 percent of all sulfur dioxide emissions came from the energy sector, and almost all of it came from coal plants.

Despite the claims of the Trump administration and the coal industry, coal has never been and will never be clean. To continue to pretend that coal’s time has not passed, and not move as quickly as possible to replace this dirty and obsolete source of electricity with cleaner, cheaper renewable energy, is an irresponsible sacrifice of Americans’ health and pocketbooks.

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