The world is engaging in a profound transition with regards to the way we produce and use energy.
The era of energy derived from the burning of fossil fuels is coming to an end, and a cleaner, more reliable energy future will be the new normal. How long this change will take is, however, still a matter of fierce debate.
Rocky Mountain Institute (RMI) CEO, Jules Kortenhorst, argues that this energy transition must be prepared for urgently – because it is coming up rapidly. In a new report from the World Economic Forum’s Global Future Council on Energy – The Speed of the Energy Transition – compelling evidence is shared about the arguments for retiring coal plants.
According to the report the next US president could economically retire the nation’s coal plants and buy back the planet’s future – all while saving US consumers billions.
As highlighted by Kortenhorst, “This economic business case is not too good to be true and must be actioned – since the shift away from coal is happening more slowly than the planet needs.”
Some of the key arguments made for retiring coal plants include:
- Coal-fired power plants are overcharging Americans for dirty power when they’d overwhelmingly prefer clean power that’s actually cheaper.
- As new solar and wind are so much cheaper, even without federal tax credits, RMI estimates that one-third of the 231 remaining US coal plants could be replaced with clean energy at negative net cost.
- Closing these coal plants an average of 10 years early would eliminate a gargantuan 12 billion tons of CO2 at the bargain cost of $3 per ton.
- Utilities can refinance or seek partial debt relief, passing on as much as $6 billion in cost savings every year to customers when they retire coal plants.
- Recycling saved capital into clean energy that is much less expensive than operating the old coal plants can unlock another $7-10 billion in annual ratepayer savings – a win-win for customers and the environment.
As Kortenhorst explains, “The question of the timing of the energy transition is a critical one: either the tipping point is right before our eyes in the decade to come, or it is far into the future, beyond the planning horizon of most companies.”
We must ensure that humanity does not miss this opportunity to achieve a sustainable world where the risk of catastrophic climate change is limited.
- The Rocky Mountain Institute merged with the Carbon War Room (CWR) in December 2014. The CWR was founded by Richard Branson and Virgin Unite as a think tank to work on issues regarding market-based solutions to climate change.