Historical costs of coal-fired electricity and implications for the future
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Trancik_coalpaper.pdf
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1.1 MB
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Adobe PDF
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6774f6b58d177f6ed2f9bc5b514a88dc
Author(s)
McNerney, James
Doyne Farmer, J.
Trancik, Jessika
Date Issued
April 2011
Journal
Energy Policy
Publisher
Elsevier
Citation
McNerney, James, J. Doyne Farmer, and Jessika E. Trancik. “Historical Costs of Coal-Fired Electricity and Implications for the Future.” Energy Policy 39, no. 6 (June 2011): 3042-3054.
Version
Author's final manuscript
Abstract
We study the cost of coal-fired electricity in the United States between 1882 and 2006 by decomposing it in terms of the price of coal, transportation cost, energy density, thermal efficiency, plant construction cost, interest rate, capacity factor, and operations and maintenance cost. The dominant determinants of cost have been the price of coal and plant construction cost. The price of coal appears to fluctuate more or less randomly while the construction cost follows long-term trends, decreasing from 1902 to 1970, increasing from 1970 to 1990, and leveling off since then. Our analysis emphasizes the importance of using long time series and comparing electricity generation technologies using decomposed total costs, rather than costs of single components like capital. By taking this approach we find that the history of coal-fired electricity suggests there is a fluctuating floor to its future costs, which is determined by coal prices. Even if construction costs resumed a decreasing trend, the cost of coal-based electricity would drop for a while but eventually be determined by the price of coal, which fluctuates while showing no long-term trend.
MIT Department
Massachusetts Institute of Technology. Engineering Systems Division
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
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DOI of Published Version
https://doi.org/10.1016/j.enpol.2011.01.037
