Companies that use or are developing coal-fueled power plants are increasingly risky investments, according to a report by Synapse Energy Economics Inc. for the Interfaith Center on Corporate Responsibility. “Coal is losing its appeal as a predictable investment and is instead fraught with uncertainty,” especially from potentially huge new regulatory and other unexpected costs, said the report, “Don’t Get Burned: The Risks of Investing in New Coal-Fired Generating Facilities.”
A “seismic shift in the understanding of energy use and its impacts, coupled with rising power plant construction costs, have exposed coal to shifting circumstances and greater risk,” the report stated.
Companies proposing new coal-fired power plants could face government-mandated reductions in greenhouse gas emissions, policies promoting increased use of energy efficiency and other factors that would “adversely affect the relative economics” of the plants, according to a statement from ICCR.
“Historically, coal-fired power plants were a relatively stable and safe investment,” David Schlissel, Synapse Energy senior consultant and the report’s lead author, said in the ICCR statement. “But that’s no longer true.”
The report drew a comparison of the risks in coal now to those that hurt the U.S. nuclear power industry in the 1970s.