Shipping coal vs. shipping electrons

Which is cheaper?

• To ship one ton of coal 1,000 miles (by freight rail), or
• To transmit one ton of coal-electricity 1,000 miles (on high-voltage power lines)

Intriguingly, moving coal is much cheaper than moving eletrons, even with the most efficient HVDC lines.

The average cost (precisely, revenue to railroads) for shipping coal is 2.50 cents/ton-mile, as of 2010 [1]. More fine-grained cost data is available from the EIA [2], from sampling of rail waybills. There's a large variance, ranging from 1.07 cents/ton-mile (Wyoming->Iowa) to 7.40 cents/ton-mile (West Virginia intra-state). On a cursory look, the broad trends seem to be (i) midwest freight (flat terrain) is cheaper than Applachian; and (ii) long routes are cheaper per mile than short ones.

An average ton of US coal has 19.583 million btu of heat. The average US coal plant uses 10,415 btu per kWh (i.e., is 32.8% efficient), for a yield of 1,880 kWh(elec.) per ton coal. So, normalized to 1,000 miles: the average shipping cost is $25/ton or $13.30/MWh(e). On cheaper midwest routes, such as Wyoming->Illinois or Wyoming->Michigan, the cost is $6.70/MWh, $7.82/MWh, respectively. An expensive Appalchian route, West Virginia->Pennsylvnia, is $24.89/MWh. (Again, this is per 1,000 miles of distance). (More advanced coal plants, like this recent German project, are about 30% more efficient; this assumption would lower per-MWh rail costs by 30%).

Here are some representative cost figures [4] for long-distance, high-capacity transmission. For 1,000 miles, even the cheapest HVDC solution (+/- 800 kV) is rather more expensive than the $13.30/MWh(e) freight equivalent. Compared to midwestern rail freight ($6-7/MWh), it's more than twice as expensive!

Michael Bahrman, P.E. (ABB): "HVDC Transmission: An economical complement to AC transmission"

As it stands right now, the cost gap is even bigger than this: ultra-high-voltage transmission isn't really deployed in the US. As this map from NPR shows [5], most long-distance transmission is 345 kV AC -- the most expensive on that graph, up to ten times the cost of freight coal. (This map doesn't include lower-voltage lines below 345 kV, which are far more common on short distance scales [6][7]).

NPR: Visualizing the U.S. Electric Grid

This puts some logic behind the absurd amount of coal freight in the US. [1] puts coal as 43% of US rail freight (by weight). From the 1.1 billion tons of US coal mined annually, more than half a trillion ton-miles are logged -- an average migration of 514 miles. The bulk of this by rail, at costs ($10-20/ton) as high as the mined cost of coal itself. One map puts the distances in perspective: there is Wyoming coal being burned outside of Altanta.

EIA: Coal Transportation Rates to the Electric Power Sector

[1] Association of American Railroads | Railroads and Coal

[2] PDF EIA | Estimated rail transportation rates for coal, basin to state, STB data (main site: [3])

[3] EIA | Coal Transportation Rates to the Electric Power Sector

[4] ABB | HVDC Transmission: An economical complement to AC transmission

[5] NPR | Visualizing the U.S. Electric Grid

[6] FEMA | United States Transmission Grid

[7] PDF NARUC | Transmission 101