Coal Cost Crossover 3.0

The report 'Coal Cost Crossover 3.0' analyzes the economic viability of existing coal-fired power plants in the United States compared to new renewable energy alternatives. Using 2021 data and accounting for the Inflation Reduction Act (IRA), the study finds that nearly all coal plants are more expensive to operate than replacing them with wind or solar, particularly when resources are sited locally to leverage existing grid interconnections and energy community tax credits.

• The vast majority of coal-fired power plants in the U.S. are now more expensive to operate than replacing them with renewable energy. Specifically, 99 percent of all coal-fired power plants are more expensive to operate on a forward-looking basis than the all-in cost of replacement renewable energy projects, and 97 percent are more expensive than renewable energy projects sited within 45 kilometers.
• The Inflation Reduction Act (IRA) has significantly improved the economics of replacing coal with clean energy through extended tax credits and specific bonuses. Projects located in 'energy communities'—which include areas where coal plants have been retired since 2009—can receive a 10 percent tax credit boost.
• Replacing existing coal plants with local solar or wind resources presents a major economic opportunity for community reinvestment, with the potential to drive $589 billion in local capital investment to support job creation and economic diversification.
• The cost savings achieved by switching from coal to local solar are substantial enough to fund a significant buildout of energy storage. The analysis indicates these savings could finance 137 GW of four-hour batteries across all plants, which represents 62 percent of the coal fleet's nameplate capacity.
• Local renewable replacement is particularly advantageous because it can bypass long interconnection queues by utilizing the existing plant's interconnection infrastructure, thereby reducing costs and accelerating deployment.
• The report identifies that for more than three-quarters of U.S. coal capacity, the cheapest renewable option is at least one-third cheaper than the ongoing costs of the coal it would replace.
• The IRA provides new financing mechanisms to help utilities manage the debt associated with uneconomic coal assets. This includes a $5 billion appropriation to the DOE's Loan Programs Office for the Energy Infrastructure Reinvestment (EIR) program to support $250 billion in loan-making authority, and a $9.7 billion program for rural electric cooperatives through the USDA.

APA

SOLOMON, M., GIMON, E., O’BOYLE, M., PALIWAL, U., & PHADKE, A. (2023). Coal Cost Crossover 3.0. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Coal-Cost-Crossover-3.0-2.pdf

Chicago

SOLOMON, MICHELLE, ERIC GIMON, MIKE O’BOYLE, UMED PALIWAL, and AMOL PHADKE. Coal Cost Crossover 3.0. Energy Innovation, 2023. https://energyinnovation.org/wp-content/uploads/Coal-Cost-Crossover-3.0-2.pdf.

Wikipedia

{{cite report |last1=SOLOMON |first1=MICHELLE |last2=GIMON |first2=ERIC |last3=O’BOYLE |first3=MIKE |last4=PALIWAL |first4=UMED |last5=PHADKE |first5=AMOL |title=Coal Cost Crossover 3.0 |publisher=Energy Innovation |date=January 2023 |url=https://energyinnovation.org/wp-content/uploads/Coal-Cost-Crossover-3.0-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{solomon2023coal, author = {SOLOMON, MICHELLE and GIMON, ERIC and O’BOYLE, MIKE and PALIWAL, UMED and PHADKE, AMOL}, title = {{Coal Cost Crossover 3.0}}, institution = {Energy Innovation}, year = {2023}, month = jan, url = {https://energyinnovation.org/wp-content/uploads/Coal-Cost-Crossover-3.0-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }