You miss my point.  I don't dispute that on the margin hydro is the cheapest thing on the grid, followed by nuke, followed by coal.  And in a world where no one expects to earn returns on their capital, that's a valid comparison.  Unfortunately, it's a pretend world - and utterly inappropriate in the Sunflower context, where the investor is trying to pressure the legislature into letting him invest capital (presumably, to earn a return).  

Historically, the coal/hydro/nuke dominated states have enjoyed cheaper electricity, but this has much to do with the fact that (a) the capital for the plants that they built has been fully amortized - remember that we really haven't built any new nuke or coal capacity in 3 decades, and (b) when it was built, it was much cheaper.

Re (a) once the capital is paid off, marginal costs are all that matter - but that date is a long way off.  Re (b), a new coal plant is nearly twice as expensive because of the need to be Clean Air Act compliant (and less efficient, for the same reason).  Add to that overall inflation in commodity prices in recent years and you have a huge change in the economics of coal.  The coal plants that are going in nowadays are getting quoted at ~$3000/kW installed cost.  Let's say you need 12%, 25 year capital amortization on that investment (typical for utility commission-sanctioned returns).  That means that you need to pay off $382/kW/year.  A modern coal plant runs at about a 70% capacity factor, so that kW of capacity will generate 8760x0.7 = 6,132 kWh/kW.  So the capital recovery on the coal plant alone costs $402/6132, or 6.2 cents.  Add 25% to that to account for reserve margin and distribution losses and you're up to 7.8 cents.  Throw in another $1300/kW for the transmission and distribution infrastructure you need to connect the plant to the load (under the same amortization schedule) and you're up to 10.5 cents.  And I haven't even gotten to the fuel costs yet!

So yeah, coal is cheap if you don't have to pay for the capital.  But that's not the offer on the table.  

(Note that you need to do the same math for centrally-sited gas, but only have about half as much on the capital at ~$1500/kW.  So yes, your marginal price is higher, but you end up being not that far off once the capex is factored in.)

Sean Casten wrote: The coal plants that are going in nowadays are getting quoted at ~$3000/kW installed cost.

Please name some of those ~$3,000/kW quoted coal plants.

Sean Caston wrote: Just about all of them

When you say all, do you mean none?

Those are the same two articles you indirectly linked-to above. Neither article mentions any specific "coal plants [...] going in nowadays [...] getting quoted at ~$3000/kW installed cost." Even the recent Duke Power unit of only 800 megawatts (and it might have been cheaper/kW if it had been allowed to be 1,600 megawatts, as originally-planned) was quoted at less than $2,500/kW.

Could you please name some names of these $3,000/kW coal plants you speak of, instead of linking to off-topic articles?

Wow, and I thought it was only $2100/KW

_

So $3000/KW.
That means a 70% increase in cost for CCS, and we are talking $5100/KW

Thats insane!

Almost any industrial sclae renewable could beat that (WITH dispatchibility included!!!)

GreyFlcn wrote: So $3000/KW.

Please name one of these $3,000/kW coal plants you speak of, GreyFlcn.

I'm not trying to be off-topic - they are simply the only places I am aware of in the press that acknowledge what those in the industry are already keenly aware of, but rather hesitant to say publicly, for obvious reasons.  

(Note that the Duke plant actually is at $3000, but that hasn't been reported yet.  I recently heard that their $2500 number doesn't include the construction finance costs, which they clearly have to pay.  Add those in, and they've topped $3000.)

So while you are generally right that the published reports coming in right now are in the $2000 - $2500 range, the actuals that are starting to materialize in rate case filings and in other behind-the-scenes discussions are considerably higher.  (Another anecdote: a friend at a midwestern utility told me that the cost of scrubbers alone have doubled in the last 12 months due to construction costs, and they don't know what to forecast by the time the new coal plants are built and they have to place purchase orders.)  There is a huge capital cost explosion looming.

But even if all these anecdotes prove to be wrong, it's only a second order impact.  Cut $3000/kW to $2000/kW if you want.  You still have to add in $1300/kW for T&D, and you still have to add charges for reserve margins and line losses, and so you still end up at numbers for power from these plants that are way above the 1.5 cent nonsense spouted by Sunflower's CEO.

You hit the nail on the head.  But it's worse, because you need to add in the $1300/kW for T&D.  The actual capital cost to build new generation and connect it to load must include that number.  Any honest analysis of the true costs of competing delivered power options quickly concludes that any on-site source under $2000/kW or so is vastly cheaper, even after higher costs of capital for non-utility money are taken into account.

And for those trying to follow this discussion
T&D means transmission and distribution.

i.e. The additional power lines needed to handle the increased capacity.

these discussions about how much coal costs are pretty much irrelevant

The real cost is the on that's borne by third parties, the external cost, or externalities

The externalities from coal generation are huge, it shifts so much of its cost onto society that is a social crime

I have a degree in econ, I hope I don't need to prove to you any more that coal is extremely costly to our society, and that these costs, gone unchecked, will be a major liability to long-term economic growth

we need to stop examining financial decisions in isolation from their real social costs, continuing to do so, which is a hallmark conservative ideal, fundamentally undermines the functioning of the market system

its a market failure
its a political failure

we're just sitting here waiting for the climate failure, anyone got a price quote on that?
try $30 trillion in insurance damages

While it's all fine and nice to say "Gee they should account for this"

As is it's more of a matter of the laws on the books, right now, dictate that coal is much more expensive than it was even 3 years ago.

We're talking well over 100%-150% increase in cost.

So as it is, on the books, right now, Coal is way too expensive.

Just in raw dollar costs.

Coal is almost free.  Burning coal is expensive.  Collecting sunlight is less expensive than burning free coal.

Spot on - the basic theory that coal is cheap is a myth.  And yes, if we build in all the externalities it's even more of a myth, but even without it, it doesn't work.  This is a MASSIVE opportunity for the enviros to leverage today's reality.  We may not be able to justify some clean technologies at today's energy costs (and without all the externalities factored in), but that doesn't change the fact that lots of those technologies are much cheaper than the alternative to build new coal plants which - if built - will massively increase our power costs, at which point clean techs will come on line to out-compete the coal plants and drive down their capacity factor and lower returns to coal plant investors.  We would be much better off to simply build the clean stuff in the first place purely on economic grounds under today's regulatory regime.  All the more so if we factor in the externalities, but we don't actually need to.  This is a HUGE point, and one we cannot make loudly enough.

Y'all are forgetting a few things. Why did the province of Ontario decide to SHUT DOWN existing coal-fired plants? Because they calculated that the healthcare costs from running those plants were so high that they'd save money without using these already built plants. This is without taking into account the costs of mining, because, unfortunately, if Ontario had a coal mining economy it would have politically impossible to move away from coal no matter what the costs. Yet, as a resident of West Virginia, I can tell you that the costs of mining are very high, if a bit hard to measure. Thousands of acres of some of the most biologically diverse forests in the world are razed so the mountaintops can be thrown into the valleys, the coal removed and a hasty reclamation performed. In essense, thousands of acres per mine are used up for the coal and tossed aside like a used tissue. Then the coal is washed, and the handiest way to do this involves ugly unnatural settling ponds, holding billions of gallons of black or aqua or grey sludge, nestled among the remaining peaks... and sometimes leaking into water supplies.
Then the coal must be transported. The coal industry is powerful, so the problem that overloaded trucks were killing too many people on narrow mountain roads was solved by raising the weight limit for coal only, so the trucks would no longer be "overloaded." It will cost taxpayers billions in extra repairs of roads or bridges.
Ontario did not have to considerany of those costs--only the costs of burning the coal, in terms of asthma and emphysema and perhaps mercury poisoning. I doubt if they considered global climate change, but after all, the worst that will do is render our planet uninhabitable.
Sorry to go on so much, but when people say coal is cheap, they mean they have gotten away with paying a small fraction of the costs, and arranging for others to pay most of the cost.