Study addresses economic impact of closing coal-fueled power plants in Iowa

posted on Thursday, October 7, 2021 in Energy News

Declining trend in power plant jobs and spending to continue

DES MOINES, Iowa – Oct. 7, 2021 – Coal-fueled power plant jobs and spending are on the decline in Iowa, tied largely to shifts in the economics of renewable energy. The transition away from coal-fueled electric generation presents significant but manageable challenges to the seven communities where coal-fueled power plants are located, according to a new Iowa State University study.

The study, titled “The Economic, Fiscal, and Social Impacts of Utility-Owned Coal-Fired Power Plants in Iowa,” commissioned by the Iowa Environmental Council, analyzed the economic impact of the power plants to help local community leaders prepare for the future.

“Iowa’s energy generation system is changing, impacting the economies of communities where coal-fueled power plants are located,” said study author Eric Christianson, community and economic development specialist formerly with Iowa State University Extension and Outreach.

In 2010, 72 percent of Iowa’s electricity was produced by coal-fueled power plants located in the state. Last year, only 22 percent was generated by burning coal. As a result, coal-fueled power plant spending and jobs are on the decline.

One in seven coal power plant jobs in Iowa disappeared between 2016 and 2020, with employment dropping from 712 to 613 jobs. In the same timeframe, expenditures at the power plants were down about a third, falling from $525 million to $333 million. Those figures will decrease again next year when Alliant Energy closes its coal-fueled Lansing Generation Station located in Allamakee County in northeast Iowa. Alliant Energy has stated it will eliminate all coal-fueled power plants from its generation fleet by 2040.

“Proactive communities planning for this reality will be better positioned to manage any changes and even prosper from them,” Christianson said. “Community leaders who are not already preparing for the change should begin now.”

One of the most important findings of the study was the pay differential between jobs at the plants and available replacement jobs in the area. Dr. Peter Orazem, a professor of economics at Iowa State University, collaborated on the study. “Jobs in electric utilities are generally well-paying and pay better than similar jobs in the area,” explained Dr. Orazem. “When these plants close, it is likely workers will have to move to other plants to find similar pay or take a substantial pay cut to stay in their current location.” Ensuring workers can obtain jobs adequate to support themselves and their families is an important part of transition planning.

“As a statewide organization seeking to drive an equitable and beneficial transition to clean power in Iowa, we’re committed to helping business leaders, community leaders, and locally elected officials where coal-fueled power plants are located plan to effectively manage the changes required to have 100 percent clean power in Iowa by 2035,” added Kerri Johannsen, Energy Program Director with IEC. “We commissioned this study to ensure that all Iowans benefit from this transition.”

In August, the Iowa Environmental Council set a goal for Iowa to reach 100 percent clean power by 2035. “Achieving 100 percent clean power in Iowa by 2035 is absolutely doable,” said Iowa Environmental Council Executive Director Dr. Brian Campbell. “It’s important for Iowa to do its part in addressing climate change.”


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