Coal Plant Retirements Present an Opportunity to Transition to a More Sustainable Energy Grid

By Amelia Schlusser, Staff Attorney

American Electric Power (AEP)—one of the United States’ largest electric utilities—recently announced that it will close seven coal-fired power plants by the end of May. AEP also plans to convert an additional two plants to run on natural gas. According to ClimateWire, these plant closures and conversions will eliminate 6,000 megawatts of coal-fired power capacity in the eastern United States.

While the AEP plant closures should curb air pollution and help the utility comply with federal air pollution regulations, the announcement has also sparked renewed hostility towards the Obama Administration’s efforts to control greenhouse gas emissions. The Intelligencer/Wheeling News-Register cited the closures as evidence of the “dire consequences” of President Obama’s “war on coal.”

It is true that AEP’s coal-plant retirements will have some negative impacts on a localized level; the utility announced that it is laying off more than 250 employees at six of the plants. It is also true that the financial outlook for the coal-fired power industry looks increasingly grim. However, reducing fossil fuel consumption presents a welcome opportunity to reduce greenhouse gas emissions, protect public health, and promote economic growth in the U.S. by transitioning to a renewable energy grid.

According to a recent Duke University study, the U.S. coal industry lost more than 49,000 jobs between 2008 and 2012. During that same period, job growth in the renewable energy sector increased dramatically. The Solar Foundation found that the U.S. solar industry gained 81,000 jobs between 2010 and 2014. According to Environmental Entrepreneurs, the U.S. created almost 80,000 clean energy and clean transportation jobs in 2013 and an additional 47,000 jobs in 2014. On a national scale, these job increases more than offset the job losses associated with reductions in coal-fired generation. And a recent report by the New Climate Institute concluded that if the U.S. obtains 100% of its electricity from renewable sources by 2050, we would prevent 27,000 premature deaths a year due to air pollution and create 650,000 full time-equivalent jobs in the renewable energy sector.

States are starting to acknowledge the economic benefits associated with renewable energy. This week, for example, New York Governor Andrew Cuomo announced a $160 million program to increase renewable energy development in the state. Governor Cuomo anticipates that this investment will have a positive impact on the state’s economy—the governor’s office estimated that every $1 spent on renewable energy in New York generates an estimated $3 in economic benefits for the state. And earlier this year California Governor Jerry Brown called for the state to obtain 50% of its electricity from renewable sources by 2030, which appears to be an attainable goal.

Transitioning to a green energy system will provide numerous economic, environmental, and societal benefits for the U.S., but we must ensure that we have strong, legally defensible policies in place to facilitate this transition. In addition to implementing strong renewable portfolio standards and offering economic incentives for renewable energy development, states should take a proactive role in encouraging utilities to replace aging fossil fuel units with renewable generation. AEP’s coal plant retirements present a rare opportunity to replace fossil fuel generation with clean, renewable resources, and regulators in Ohio, West Virginia, Virginia, and Indiana should encourage the utility to replace these seven coal plants with renewable resources. Ensuring that renewable energy replaces closed coal plants will help these states enjoy the kind of job growth much of the nation is already experiencing.