Repurposing coal plants—regional economic impacts from low carbon generation

Abstract

Repurposing coal power plants in the United States may provide significant opportunities to incentivize low-carbon and renewable electricity generation created by the Inflation Reduction Act (IRA). Re-using coal sites for their existing electric grid interconnections and infrastructure could reduce costs and provide benefits to coal-based communities experiencing energy transitions. This study estimates local employment, labor income, and tax revenue effects from renewable and low-carbon generation options repurposing coal power plants and meeting their economic impacts at existing coal plant sites in North Carolina. The study bridges gaps in energy transition studies by including site feasibility assessment of advanced reactors for former coal power plant sites, renewable electricity generation, and thermal energy storage. It also considers cost advantages of reusing existing power plant interconnections, IRA discounts, and generation technology economic impacts using IMPLAN. A least-cost quadratic optimization model considers different site-specific electricity generation portfolios to analyze site-based economic impacts and associated technology costs meeting or exceeding site-based coal generation and its economic impacts. This study finds that replacing coal generation costs less than maintaining the current coal fleet, a technology-inclusive portfolio provides the least-cost pathway, and benefits may exceed site-based impacts of existing coal plants. Local tax revenues from advanced reactors and thermal energy storage systems may increase revenues by at least $28 million. Across all repurposing scenarios, replacing existing coal plants with energy storage, renewable, and low-carbon generation leads to net employment growth and tax revenues, indicating further benefits to a rapid and more equitable decarbonization through economic development.