Coal has long been the mainstream of energy production because it is the cheapest to produce, but this may not necessarily be the case in the future: since 2000, electric plants have had to pay more for coal. In 2005, coal’s delivered cost was 24.3% higher than it was in 2004, and in 2004 the rates were 40.8% higher than they were in 2000. Increased costs in coal prices are due to many issues, including higher extraction taxes, higher diesel fuel costs for production and transportation, and costs for implementing new safety regulations.

In 2005, there were 616 coal-fired power plants in the U.S. The average plant was 40 years old and generated 2,013 million MWh. Their combined output represented 49.6% of all electricity generated that year.

Coal has many negative environmental impacts. Mining it causes erosion and results in toxic chemicals leaching into streams and aquifers. Burning it produces fine particles that enter the air stream, which in turn cause asthma and respiratory disease and reduce human lung functionality. Furthermore, coal creates harmful greenhouse gases: they represent as much as two-thirds of the nation’s annual sulfur dioxide emissions (leading to the acid rain that kills plants, fish, and animals), one-quarter of the nation’s nitrogen oxide emissions (in turn creating smog that damages crops and forests), and one-third of the nation’s carbon dioxide emissions (which result in global warming).

Over the past 20 years, the U.S. government has invested more than $6 billion in developing and testing cleaner coal-burning technologies. Clean coal power plants collect and store greenhouse gas emissions. However, hurdles with the technology still remain. One problem is that it will cost 20 to 30% more to build a clean coal plant than a new coal power plant. Since 2002, capital costs have risen more than 90%, resulting in a 800-MW plant costing $2 billion (or $2,500 per kW of capacity). The E.P.A. has estimated that capturing 90% of carbon dioxide emissions using a clean coal IGCC (Integrated Gasification Combined Cycle) power plant would increase capital costs 47%. Therefore, a new clean-coal plant will cost anywhere from $2.4 to $3 billion (or $3,000 to $3,750 per kW of capacity). To further complicate things, there is still the issue of how and where to store the collected greenhouse gases. Assuming carbon dioxide can be stored in compressed containers at $17 a ton, an 800-MW plant producing 5.5 million tons of CO2 would see an additional expense of $93 million per year. This would further increase the cost of electricity…and this is in addition to higher coal prices and higher plant amortization costs.

US Coal Powered electricity consumption in 2005: 2,013 million MWh

US Coal Capacity Usage in 2006: 72.6% of 312,956 MW