20 years ago, coal made up more than 50% of our nation’s electricity supply1. Today, it accounts for less than 20%. In addition to efforts to transition away from coal for environmental, health, and safety reasons, coal has simply become less cost-effective to operate than other alternatives.
Spurred by recent legislation2 like the Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS and Science Act, 99% of existing coal plants1 in the U.S. are more expensive to operate than the all-in cost of new renewable energy, specifically wind and solar. And the margins3 are not small; three-quarters of existing coal plants could save at least 30% by switching to new wind or solar, with some poised to save nearly 80% of costs.
Coal production peaked in 20114 and has been declining ever since. With this decline comes better air quality and fewer emissions, but also leaves people out of work and communities hurting for tax revenue. When Biden took office, he established a working group2 to investigate avenues for revitalizing these “energy communities,” which found 25 areas of the U.S. with 18,000 mine sites across 1.5 million acres eligible for priority funding.
As part of the aforementioned pieces of legislation, $450 million2 is specifically available for coal community revitalization projects, with an additional $16 million2 available to research solutions for mining rare earth minerals from coal mining waste streams. To transition “energy communities” into clean energy hubs, the Department of Energy is responsible for allocating spending for new clean energy projects in priority regions, which will test the efficacy of repurposing infrastructure2 like transmission lines and substations. The funds up for grabs come in addition to the $14.1 billion2 that the federal government has already invested plus the $7.4 billion2 in private investment in “energy communities” since Biden took office.
One place where this energy transition is already taking place is in Nevada, where the state’s last remaining coal plant is scheduled to close by 20251. Concerned about the resulting loss of jobs, energy security, and tax revenue, NV Energy5 will be replacing the coal plant with two new solar-plus-storage projects on adjacent land. These projects5 will create hundreds of construction jobs and help Nevada achieve its goal of deriving 50% of its energy from renewable sources by 2030.
If the rest of the country were to take advantage of the funding earmarked for the energy transition as well as the additional “energy community” tax incentives by transitioning all coal to renewable energy, the U.S. power sector would decrease its emissions by 60%1. This transition would also prevent thousands of deaths, hospitalizations, and heart attacks every year1. While energy communities cannot rely solely1 on renewable energy to fully replace jobs and tax revenue, the cost comparisons speak for themselves and are already ushering in the energy transition.
The TrueShares Eagle Global Renewable Energy Income ETF (RNWZ) offers investors core renewables exposure and income while seeking long-term growth of capital. We do this by investing in renewables infrastructure companies that are essential to accelerating the energy transition.
Forecasts are inherently limited and should not be relied upon when making investment decisions. There is no guarantee the sector will experience projected growth. In addition, there is no guarantee it will translate to positive fund performance.
Associated Risk of Investing in Renewable Infrastructure Companies. Because the Fund invests in Renewable infrastructure Companies, the value of Fund shares may be affected by events that adversely affect companies in that industry. These can include contract counterparty defaults, adverse political and regulatory changes, poor weather conditions for renewable power generation, falling power prices, losses on financial hedges, technological obsolescence, competition and general economic conditions.
- https://www.forbes.com/sites/energyinnovation/2023/01/30/99-of-us-coal-plants-are-more-expensive-than-new-renewables-a-coal-to-clean-transition-is-worth-589-billion-mostly-in-red-states/?sh=887683225104
- https://www.cnbc.com/2023/04/04/biden-releases-plan-to-revitalize-coal-communities-with-clean-energy.html
- https://energyinnovation.org/2023/01/29/coal-cost-crossover-3-0-interactive-visual-feature/
- https://ieefa.org/resources/us-track-close-half-coal-capacity-2026
- https://www.nvenergy.com/about-nvenergy/news/news-releases/nv-energys-new-solar-projects-to-replace-last-owned-coal-plant
