Coal can't compete with cheaper alternatives and the industry's true costs are higher than they appear

By Daniel Cohan
Rice University

(THE CONVERSATION) — There are costs associated with electricity beyond what shows up on your monthly bill.

When that energy comes from coal, residents who live downwind pay through poorer health and, as with all fossil fuels, the whole world pays for this combustion in the form of a warmer climate. Cleaning up or closing the nation’s dirtiest power plants could help stem the damage all around.

As an atmospheric scientist, I worked with two students to compute some of the often-overlooked costs of coal-fired power stations. We found that the damage to public health and the climate this source of electricity causes far exceeds the money power generators earn from the electricity they sell.

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Three cents isn’t enough

Texans spend roughly 11 cents for each kilowatt-hour of electricity, enough to power a television for few days, no matter how it was generated. Most of that revenue pays for the power to be transmitted to homes and marketed to consumers.

Less than 3 cents from every 11 cents on Texan electric bills flows to the companies that generate the power.

Those three pennies don’t cover even the direct costs of operating coal power plants in every case.

Coal-fired power now supplies less than 24 percent of the electricity Texas generates, down from about a third in 2017 following the closure of three large coal plants in early 2018. Luminant, the company that shuttered many of those plants called them “economically challenged” even though coal is cheaper in Texas than on average in the U.S.

Coal’s woes aren’t limited to Texas. As a result of the fuel’s competitive disadvantage, 275 of the nation’s 530 coal plants closed or were converted to natural gas between 2002 and 2018.

The social cost of carbon

If utilities had to compensate society for the cost of the pollution Texan coal-fired power plants produce, even more of them would be on the chopping block. The rationale for this concept, known as the social cost of pollution, is that producing electricity releases pollution that harms the climate and public health. Generating each kilowatt-hour of power from coal results in more than 2 pounds of climate-warming carbon dioxide along with other pollutants that harm human health.

Assuming that the social cost of carbon dioxide is around US$52 per ton, near the middle of a range of government estimates, then the damage caused by coal plant emissions is roughly 5 cents per kilowatt-hour, just in terms of climate change.

Those climate impacts are fairly consistent across all of the 13 Texas coal plants that we studied. That’s because each power plant burns a similar amount of coal to generate each kilowatt-hour of electricity.
For global warming, the location of emissions is irrelevant, since carbon dioxide accumulates in the atmosphere for centuries and its impact is worldwide.

For health, the location of a given coal plant matters, since more people are exposed when coal-fired power plant pollution is emitted near or upwind of densely populated urban areas. Even bigger differences arise from disparities in the various pollution-control devices that coal-fired power stations install.

Most coal plants already control two pollutants that are byproducts of their power generation, ash and mercury, very effectively. That leaves two pollutants, nitrogen oxides and sulfur dioxide, that are most damaging to public health.

Nitrogen oxide emissions react in the atmosphere to form ground-level ozone, sometimes referred to as smog. Sulfur dioxide converts into microscopic particles known as particulate matter that increase rates of heart attacks, strokes and other diseases.

Together, power plant emissions of these two pollutants kill tens of thousands of Americans each year, scientists estimate.

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The dirtiest plants

In our study, we ran computer models to simulate how much air quality and health would improve if certain Texas coal power plants shut down. As we explained in an article published in the Journal of the Air & Waste Management Association, we found that coal power stations lacking modern devices to control sulfur and nitrogen pollution cause far more damage to public health than cleaner plants.

Certain coal plants emit five times as much nitrogen oxides as cleaner plants, while others emit 20 times more sulfur dioxide than the ones that have modern scrubbers.

Overall, we estimated that Texas coal plants were responsible in 2015 for several hundred deaths per year, mostly due to particulate matter from the unscrubbed sulfur pollution.

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Sulfur and nitrogen regulations

The dirtiest power plants continue to emit so much more pollution than their competitors by slipping through the cracks of a patchwork of state and federal regulations.

Nationwide cap-and-trade programs for nitrogen oxide emissions and sulfur dioxide emissions, such as the federal Acid Rain Program, let companies trade their allowances for emitting pollution.

That can be a cost-effective approach, since it motivates utilities to clean up their act. But the EPA has failed to cut national caps as quickly as power plants have cleaned up or closed down. This inaction created a glut of pollution allowances and drove their price down to just pennies per ton, even though the resulting health and environmental damage is typically worth thousands of dollars per ton.

The authorities have applied more direct regulations unevenly. The EPA has required control devices for nitrogen oxides and sulfur dioxide at new coal plants since the early 1980s, but not necessarily at older ones. A 2014 study by Duke University researchers found that nearly 80 percent of U.S. coal power plants did not meet the pollution limits required of new plants.

States have mandated stringent nitrogen oxide controls at power plants in cities that violate ozone smog standards, but not in locations that are at times upwind of those regions.

Most states required sulfur scrubbers nearly a decade ago as part of their plans for reducing haze in scenic areas. But Texas has failed to finalize its own Regional Haze Rule plan for nearly a decade, leaving it to the EPA to step in.

Although the environmental agency proposed stringent plant-by-plant sulfur dioxide rules in 2016 that were similar to those other states were enforcing, the EPA now proposes a  new cap-and-trade program that would require no pollution reductions in Texas at all.

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Phasing out

Even if federal and state regulations remain this lax, coal plants won’t last forever. The average U.S. coal plant is now 39 years old. The three in Texas that closed in early 2018 were among the five most polluting ones in the state that we studied. A fourth could close by early 2019.

The Texas closures are part of a national and global wave. Coal is becoming a less popular source of electricity due to it costing, in most locations, more than alternatives like natural gas, wind energy and solar power.

Still, as coal pollution continues to warm the climate and kill tens of thousands of Americans per year, delaying the inevitable comes at a heavy cost for us all.