A Risky Proposition

The report details the financial hazards of investing in coal power, highlighting that new coal plants are now more expensive than many cleaner options. It identifies several risk factors: eroding market share due to energy efficiency, renewables, and natural gas; volatile coal prices driven by global demand (especially from China and India); and high, unpredictable construction costs. Additionally, the document emphasizes the financial liabilities posed by EPA regulations regarding air toxins, coal ash, and cooling water, as well as the long-term risk of carbon pricing. It concludes that the traditional cost and baseload advantages of coal have disappeared, making it an unacceptably risky investment compared to a transition toward a diversified, sustainable energy system.

• New coal plants have lost their traditional cost advantage and are now more expensive than several cleaner alternatives, including new natural gas plants, wind facilities, and the best geothermal sites.
• The levelized cost of electricity for new pulverized coal plants has more than doubled between 2006 and 2011, reaching nearly $119/MWh even without carbon prices.
• U.S. coal prices are increasingly vulnerable to volatile global markets, with demand from China and India driving prices upward; for example, Powder River Basin coal contracts rose 67 percent between October 2009 and October 2010.
• There is significant uncertainty regarding coal reserves, with newer assessments suggesting that economically recoverable coal in the Gillette coalfield of Wyoming is far less than previously assumed.
• Coal plants face substantial financial liabilities from pending EPA regulations, including the Clean Air Transport Rule for SO2 and NOX, the Air Toxics Rule for mercury, and rules regarding coal ash and cooling water.
• Construction costs for coal plants rose sharply between 2000 and 2008 and remain high, with some projects reporting costs more than double their original estimates.
• Financial institutions and rating agencies are increasingly wary of coal risks, leading to downgraded debt ratings for several utilities and a suspension of loan programs for new coal plants by the Rural Utilities Service in 2008.
• Coal's market share in the U.S. is declining, dropping from almost 53 percent in 1997 to less than 46 percent in the first half of 2010, as it is displaced by energy efficiency, renewables, and natural gas.
• The traditional 'baseload' advantage of coal is becoming an anachronism as the grid requires more operational flexibility to integrate variable renewable energy sources, a role better suited for natural gas plants.

APA

Freese, B., Clemmer, S., Martinez, C., & Nogee, A. (2011). A Risky Proposition. Union of Concerned Scientists. https://www.ucs.org/sites/default/files/2019-09/a-risky-proposition_report.pdf

Chicago

Freese, Barbara, Steve Clemmer, Claudio Martinez, and Alan Nogee. A Risky Proposition. Union of Concerned Scientists, 2011. https://www.ucs.org/sites/default/files/2019-09/a-risky-proposition_report.pdf.

Wikipedia

{{cite report |last1=Freese |first1=Barbara |last2=Clemmer |first2=Steve |last3=Martinez |first3=Claudio |last4=Nogee |first4=Alan |title=A Risky Proposition |publisher=Union of Concerned Scientists |date=March 2011 |url=https://www.ucs.org/sites/default/files/2019-09/a-risky-proposition_report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{freese2011risky, author = {Freese, Barbara and Clemmer, Steve and Martinez, Claudio and Nogee, Alan}, title = {{A Risky Proposition}}, institution = {Union of Concerned Scientists}, year = {2011}, month = mar, url = {https://www.ucs.org/sites/default/files/2019-09/a-risky-proposition_report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }