Gallery: Study Finds Renewable Energy is Cheaper than Coal in the US


Photo via Shutterstock

A new study reveals that wind farms are less costly than new coal-fired plants, and cost about the same, if not less, than new natural gas plants. It sounds pretty extraordinary, but if one looks at the cost of warming and health issues caused by carbon emissions, as well as the hazards caused by sulfur dioxide emissions from coal-fired plants, the numbers begin to fall sharply in favor of renewable energy.

Photo via Shutterstock

The report, authored by Laurie T. Johnson, Chief Economist at the National Resources Defense Council (NRDC), along with Starla Yeh and Chris Hope, examines the Social Cost of Carbon (SCC). The metric is currently used by the U.S. government and measures how much damage one ton of CO2 emitted today causes now and into the future. The EPA describes it as “a comprehensive estimate of climate change damages and includes, but is not limited to, changes in net agricultural productivity, human health, and property damages from increased flood risk.”

All quite sensible; worldwide, natural disasters are estimated to have cost around $2.5 trillion since 2000, and extreme weather events, worsening as a result of warming, cost the US $140 million last year alone. But for some time there has been contention over the government’s SCC estimates, which place this cost at between $11 and $52 per ton of CO2. Less conservative estimates, however, put these figures at between $62 and $266 per ton. And that makes quite a difference.

So back to the study, Johnson describes that “Using widely available models of climate change pollution costs and other health damages from burning fossil fuels (i.e. from sulfur dioxide pollution), the study calculates the real cost we bear for electricity—not just what it costs to generate, but also the climate and health costs caused by power plant pollution.”

Even at the most conservative SCC calculations—with SO2 costs included—Johnson and her colleagues show that it is cheaper to build a new wind farm than a new coal-fired plant, including coal with carbon capture and storage, wherever possible. Costs for natural gas plants are significantly less than for coal, but still sit at around the same cost or slightly higher than for wind farms.

Estimating at $122 per ton of CO2 with a 1.5% reduction rate (in contrast to the U.S. Government’s $33 per ton of C02 with 3% reduction rate) we pay 8 cents/kWh for new onshore wind, 13.3 cents/kWh for new solar PV and an incredible 20.3 cents/kWh for new coal. At the government’s current figures, this would stand at 8, 13.3 and 13.2 respectively.

The full study can be found here, with an exhaustive breakdown from Laurie Johnson on her blog here. It’s potentially encouraging stuff, as Johnson wrote in a press release “The study results show that our electricity system, which generates fully 40 percent of the nation’s carbon dioxide pollution, is costly. Transitioning to cleaner energy won’t just help protect us and our children and grandchildren from climate change, it’s also good economics.”

+ The Societal Cost of Carbon: Implications for Modernizing our Electricity System


Via Treehugger


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  1. Delton Chen September 29, 2013 at 5:24 pm

    The article is comparing building a new wind farm with a coal plant. But what about the expensive equipment to handle the power intermittency and energy storage? Or was this included?
    It has been argued by some that the first comparison should be between (A1) the wind farm and (A2) the coal. The second comparison should be between (B1) the load levelling and energy storage equipment (of wind) and (B2) the coal power plant. Any thoughts?

  2. Eletruk September 26, 2013 at 8:28 pm

    Scrubbers don’t remove CO2 from coal plant emissions, they remove soot, sulfur and other nasties. So the problem of acid rain and brown air is dealt with locally (or regionally) but the global issue of greenhouse gasses has still not been solved with burning of coal. “Clean coal” (as much of a misnomer as it is) doesn’t mean no CO2, it means most of the dirty is gone. If CCS (Carbon Capture and Sequestration) is going to be required of coal power (which nobody has been able to do on industrial scale), then the cost of renewable energy is waaaay cheaper than coal.

  3. Vernon Freeck September 26, 2013 at 3:50 pm

    If we sell coal to other nations don’t the so called pollutant travel the currents, so why can’t we show our tech. on extraction from coal, and our scrubbers that we have in use in industry,

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