As America looks to adopt green-energy sources into its energy mix over the next few decades, most of the benefits of this move have been described as environmental. After all, cutting out polluting sources of energy such as coal and oil would clean up our air and keep water bodies clean and fresh for human consumption.
Furthermore, a long-term and sustained green-energy drive could halt global warming and even undo some of the damage caused by burning dirty fossil fuels for centuries. With these goals in mind, the United States is planning on investing billions of dollars into researching, developing and building green-energy infrastructure.
However, switching to green and renewable energies could also result in significant savings for states that still overwhelmingly rely on coal. Although the fear is that shutting down coal-fired power plants in favor of renewables could impact local economies by causing innumerable job losses, the numbers show otherwise.
With a whopping 90% of coal power plants costing more to run compared to renewables, transitioning to green energy could save up to $589 billion in mostly Republican states. In fact, 209 out of America’s total 210 coal-fired power plants now cost more to run compared to the cost of replacing them with solar and wind energy.
In Nevada, for instance, the state’s last power plant is slated to shut down in 2025 after four decades of service due to increasing operating costs. In its place, local utility firm NV Energy plans on building two solar-plus-storage facilities next to the soon-to-be-closed power plant by 2025, creating hundreds of jobs and replacing the dozens that would be lost after the power plant’s closure.
The solar facilities would also result in long-term and sustainable revenue for the local and state governments. In fact, these two solar-plus-storage projects could end up creating more jobs over time as they continue to harvest solar energy in the region.
Given that the Inflation Reduction Act will invest billions of dollars into green-energy projects, utility firms across the country stand to gain close to $600 billion in investment by transitioning to renewables.
Coal use is already in decline across America, with the share of coal-generated electricity in the country’s energy mix dropping from 50% of the yearly supply to less than 22% in 2022. Although the decline of coal-fired electricity was initially caused by competition from natural gas and improvements in energy efficiency that reduced electricity demand, reducing green-energy costs coupled with smart government policy has accelerated the decline.
However, enterprises such as Arch Resources Inc. (NYSE: ARCH) will still see demand for the coal they extract because not all regions will be as quick to adopt renewable in lieu of coal and other fossil fuels.
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