Renewable Replacement of Coal Energy

Research Instructor: Dr. Gal Hochman

Research Assistant: Hardik Patel, Prixy Manocha

Department of Agriculture, Food and Resource Economics

Introduction
Coal is one of the most significant anthropogenic
source of carbon dioxide emissions besides being a
non-renewables source. In the face of climate change
and energy crisis, finding economically and
environmentally
viable
renewable
alternatives
becomes imperative. In this research publicly sourced
data was used to calculate renewable replacement
capacity, production costs at utility scale and external
costs from coal and renewable technology. The
damages from mining and burning coal cost about
$345 billion to the U.S. public every year which more
than doubles the electricity prices. Renewables on the
other hand can potentially replace coal capacity with
no fuel costs and low external costs. Although
renewable technology is credit intensive, it is a
profitable option when considering its unlimited
availability and low environmental costs.

Methodology and Analysis

Cost of Replacement

To replace the coal based generation capacity with renewable options, the data published by NREL
on coal based generation capacity, technical potential for renewable technologies, costs involved in
utility scale plants and levelized cost of energy was used. The best renewable option to replace coal
capacity was chosen based on the capacity replacement margin and the levelized cost of energy (unit
cost of energy [cents/kWh]) which gives the minimum selling price required to reach the break-even
point.

The external costs for the coal were calculated by doing a

lifecycle assessment and estimating dollar amount of
damages. For example, a study estimated each ton of CO2 to
cost about $30.
CO2 emissions are the biggest source of social costs for coal
energy.

Background
Coal sourced energy forms about 18% of energy
consumed in US (1). The purpose of the research was to
calculate the price of replacing coal with renewable
sourced energy. It includes calculating private and social
costs of using the best renewable technology option out of
Solar, Wind, Hydropower, Geothermal and Biopower to
replace coal energy in each state and calculate the total
lifetime costs for each state. Social Cost of production are
paid for by a third party outside of the market usually
general public. Coal energy has many social costs like
greenhouse gas emissions, pollution and land disturbance
caused by the mining and combustion of coal. Coal also
has direct human health cost related to mining and
emissions like mercury. The health effects of these
emissions include heart and respiratory diseases and
cancer. The only significant external cost of renewable
technology includes land disturbance.

References
1.
2.
3.
4.
5.

http://www.eia.gov/
http://www.nrel.gov/
http://energy.gov/
http://en.openei.org/apps/TCDB
Epstein, P., Buonocore, J., Eckerle, K., Hendryx, M., Stout III, B., & Heinberg, R. et al. (2011). Full cost
accounting for the life cycle of coal. Annals Of The New York Academy Of Sciences, 1219(1), 73-98. http://dx.
doi.org/10.1111/j.1749-6632.2010.05890.x
6. Fthenakis, V. & Kim, H. (2009). Land use and electricity generation: A life-cycle analysis. Renewable And
Sustainable Energy Reviews, 13(6-7), 1465-1474. http://dx.doi.org/10.1016/j.rser.2008.09.017
7. Hernandez, R., Easter, S., Murphy-Mariscal, M., Maestre, F., Tavassoli, M., & Allen, E. et al. (2014).
Environmental impacts of utility-scale solar energy. Renewable And Sustainable Energy Reviews,29, 766779. http://dx.doi.org/10.1016/j.rser.2013.08.041

Levelized Cost of Energy (LCOE) gives the

net present value of the unit cost of electricity
over the lifetime of the generating asset.
It is an approximation for the price at which
the electricity would need to be sold to break
even.
LCOE summarizes the general
competitiveness of the generating technology.
It is based on average literature values.
Wind and Geothermal energy are the most
competitive technologies.

Technology

LCOE (cents/kWh)

Wind, Onshore

0.07

Geothermal,
Hydrothermal

0.069

Hydropower

0.087

Solar, Photovoltaic

0.291

Biopower

0.079

The amount of land that needs to be

transformed for the different energy
sources is very important.
High efficiency energy sources like coal
need less land transformation, but this
does not include the external costs that
coal has on the environment.
Biomass needed the highest amount of
land to be transformed because of low
efficiency and also due to biomass
competing with agricultural products for
land.

Cost of production of coal sourced energy and renewable

energy to replace coal was calculated for utility-scale
conventional generating plants.
Coal sourced energy has higher private and social cost of
production while the social cost for renewable technology
is negligible.
The major source of social cost for renewable technology
is land disturbance caused by wind and solar
technologies.

Conclusion
Transitioning from coal based generation to renewable
sourced energy will significantly reduce the social cost of
energy production while even reducing the production
costs.