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How the Premature Retirement of Coal-Fired Power Plants Affects Energy Reliability, Affordability

February 1, 2018

More than 250 coal-fired power plants in the United States have been retired since 2010, and more are scheduled to be retired. The premature retirement of these coal-fired units poses a threat to the country’s electricity supply.

Coal-fired power station

Through regulations, subsidies, and steady demonization, President Barack Obama did all he could to destroy the fossil fuel industry. While President Donald Trump promises to reverse that onerous legacy, word hasn’t reached some state and local regulators, public utility commissioners, and utilities.

More than 250 coal-fired power plants in the United States have been retired since 2010. More are scheduled for retirement. By prematurely closing coal-powered generation, regulators are imposing billions and potentially trillions of dollars of unnecessary costs on ratepayers.

In this Policy Study—the first in a series of four—Heartland Institute Research Fellow Isaac Orr and Senior Fellow Fred Palmer:

  • discuss Australia’s experience with policies that forced coal-fired power plants into premature retirement, making large parts of the country dependent on unreliable and high-priced renewable energy, particularly wind power.
  • examine the parallels between the United States and Australia and discuss problems faced by states that have aggressively promoted renewable energy.
  • examine the importance of “prudence” and diversified energy portfolios.
  • evaluate a U.S. Department of Energy study that correctly identifies natural gas-fired power generators as a reason for coal plant retirements but fails to describe accurately the role played by renewable energy subsidies in those retirement decisions.

They conclude:

Policymakers who truly have the well-being of the citizens in mind must systematically identify and eliminate the federal as well and state and local regulations, subsidies, and mandates that stand in the way of a bright energy future. Future Policy Studies in this series will help.

NOTE: This Policy Study is the first in a four-part series. Read the secondthird, and fourth parts.

Author
Isaac Orr is a policy fellow at the Center of the American Experiment on mining and energy issues.
isaac.orr@americanexperiment.org
Author
Frederick D. Palmer is a senior fellow for energy and climate at The Heartland Institute.
fpalmer@heartland.org