The cost of new wind and solar power generation has fallen below the cost of running existing coal-fired plants in many parts of the US, threatening to wreck President Donald Trump’s hopes of reviving the mining industry. New estimates published on Thursday by Lazard, the investment bank, show that it can often be profitable for US generation companies to shut working coal plants and replace their output with wind and solar power.
The calculations suggest that closures of coal-fired plants are likely to continue, eroding US demand for coal and jeopardizing Mr. Trump’s ambition to “put our coal miners back to work”. The falling cost of renewable energy is adding to the pressure from cheap gas and stagnant demand for electricity, which have cut US coal power output by more than 40 percent since 2007.
Retirements of US coal-fired plants are expected to hit a record high this year, and companies including FirstEnergy and American Electric Power have in the past few months announced further closures. Many of the plants being shuttered are reaching the end of their working lives, but even some relatively new capacity is being shut because it is no longer economically viable.