What happened to coal?

As I write this in February of 2025, there seems to be no end to bad news. But fear not, we are in the middle of a wonderful success story, the end of coal is near. Coal is an abundant energy source, but highly polluting as it turned out, and that as well as economics seems to be what doomed it.

Coal is mostly used for electricity generation, with about a third used for industry, mostly steel manufacturing where coal is a key ingredient as it supplies both heat and carbon to the process (see for example the blast furnace method of producing steel (source)). Power generation via coal is on the decline however, Ontario for example closed its last coal power plant in 2014 (source).

From https://natural-resources.canada.ca/minerals-mining/mining-data-statistics-analysis/minerals-metals-facts/coal-facts

Coal is fairly abundant, yet, altogether, once a power-plant has been built, maintained, coal for it supplied etc. the end cost per kWh comes out to something like $0.11/kWh. That as it turns out is relatively pricey, solar (on a utility scale), comes out to be $0.07/kWh, and wind is at about $0.05/kWh. Hence, its cheaper and greener for electricity providers to opt for solar and wind, over Coal.

Sourced from https://commons.wikimedia.org/wiki/File:3-Learning-curves-for-electricity-prices.png

Hydro and natural gas are missing from the trends graph above, some googling suggests hydro is at about 75% of coal, and natural gas at about the same as solar, at $63% of coal. Both hydro and natural gas are substantially cheaper than coal, at $0.08/kWh and $0.07/kWh. Thus, power generation via Coal is on the decline, as there are cheaper and cleaner options around.

There is more to Ontario’s story than just economics and greenery. What also happened is that electricity demand fell from 2005 to 2017, hence policy makers had a unique opportunity to get rid of the dirtiest electricity source, as it was simply not needed anymore.

Adapted from https://www.ieso.ca/power-data/demand-overview/historical-demand

Indeed, the story of Coal to mean shows that when economics and greenery combine, its a change that is just too hard to resist. Policymakers might do well to remember than, next time the topic of say a carbon tax comes up…

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