IEEFA: Solar-plus-storage undermines coal economics by ‘hundreds of millions’ of dollars

LinkedIn
Twitter
Reddit
Facebook
Email
For Pacificorp, early coal shutdowns could create US$238m in savings. Credit: Flickr / massmatt

Tumbling solar-plus-storage costs could see the hybrid technology become a money saver for US firms grappling with expensive legacy coal portfolios, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

Utilities shutting down coal units ahead of their end-of-life point and replacing them with renewables, stand to reap savings in the “hundreds of millions”, the think tank claimed in a recent update.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

PacifiCorp, a subsidiary of Warren Buffett’s Berkshire Hathaway Energy, is one a raft of utilities IEEFA said is “reckoning with a new reality” of coal closures. In a recent review, the firm found early retirement of certain coal units would create “potential benefits” for its 1.8 million customers.

According to IEEFA, PacifiCorp’s coal units can’t compete with “cheaper and cleaner alternatives” despite their high power performance levels. For the firm – reportedly the largest grid operator in the US West – the savings from early closures could reach the US$248 million mark, depending on scenarios.

Cost parity with mainstream gas plants

The spotlight on ever cheaper solar-plus-storage has gradually built in recent times. Only this month, new analysis claimed the duo can outcompete certain new-build gas generators in the US, and not only peaker plants as previously thought.

According to the review led by Fluence, utilities opting for solar-plus-storage can expect lower LCOEs (US$39-US$48/MWh) than comparable mid-merit NGCC plants (US$60-$116/MWh). For reference, some of PacifiCorp’s coal units feature LCOEs above the US$85/MWh threshold, based on the firm’s own stats.

The Berkshire Hathaway Energy subsidiary will not confirm the extent of coal phase-outs – nor the technologies that will replace it – until the late summer. For now, however, several of its scenarios would result in hundreds of megawatts of solar-plus-storage additions.

As noted by the IEEFA this week, other utilities have already finalised similar moves. Nevada’s NV Energy, for one, is shutting down coal plants even as it acts to add 1GW of solar and 100MW of battery storage capacity. Meanwhile, Colorado’s Xcel has filed proposals for solar- and wind-plus-storage at average prices of $30-$36/MWh.

See here for IEEFA's statement and here for PacifiCorp's note

Read Next

May 21, 2025
Installed battery storage capacity in California, US has grown from 771MW in 2019 to more than 15,500MW as of 31 January, 2025.
Premium
May 21, 2025
ESN Premium speaks with Dr. Yinghuang Ji, head of structuring at MN8 Energy, on current challenges and opportunities for growth in the energy storage market.
May 21, 2025
Regulators in Germany are considering two big reforms that could improve the business case for BESS, while developer-operator Green Flexibility has announced its first major project.
May 20, 2025
Battery storage developers and owner-operators Eku, Alcemi, Field and Energy Optimisation Solutions (EOS) make UK project progress with finance and planning approvals.
Premium
May 20, 2025
ESN Premium speaks with Chloe Hicks of EnergyCo about New South Wales’ Renewable Energy Zones (REZ) and its hopes for energy storage.

Most Popular

Email Newsletter