New report questions economic viability of coal power

A Risky Proposition: The Financial Hazards of New Investments in Coal Plants

Union of Concerned Scientists

Across the United States, the electric power sector is placing new bets on an old technology—coal-fired power plants. Utilities and other electricity producers are poised to invest heavily in retrofitting their old plants or in building new ones.

Each major retrofit or new plant represents an enormous long-term financial commitment to coal power. But as discussed in this report,  current economic, technological, and policy trends make such commitments exceedingly risky:

• Demand for coal power is being steadily eroded by competition from energy efficiency and renewable energy, which are benefiting from rising policy support, growing public investment, advancing technologies, and often-falling prices.
• Coal power faces much stronger competition both from new and existing (though underutilized) natural gas plants.
• United States coal prices are rising and could be driven much higher by soaring global demand and shrinking reserves.
• Construction costs for coal plants remain high, and all these risks make the financing of long-term coal investments both harder and costlier.
• Coal plants, new and old, are losing the cost advantages they once had, and lack the operational flexibility that will be increasingly valuable as the power grid evolves to integrate more sources of clean but variable renewable power.
• Coal power faces the financial risks posed by its many environmental impacts. The continuing damages that coal power poses to our air, land, and water—and our health—are a major financial liability that remains unresolved.
• Coal plants emit air pollutants that still kill thousands of people yearly, costing society over $100 billion per year, by one estimate (CATF 2010).

(More here.)