New report unpacks the economics of coal plants and energy transition in Iowa

Iowa’s energy story is changing fast. For decades, coal powered our homes, industries and local economies. But today, wind supplies about two-thirds of our electricity — more than any other state. Coal hasn’t disappeared, though. It still provides roughly a quarter of Iowa’s power and most of its energy-related pollution.

That shift puts Iowa at a crossroads. Our new report, Powering Iowa’s Future, examines what the transition away from coal means for our economy, our health and our communities, and what it will take to ensure that transition works for Iowans. The prospect of shutting down the coal plants rightly concerns workers and families whose finances rely on the plants for their livelihood. But smart and strategic policy planning can produce a winning scenario for those same folks by sparking new economic development as it reduces the health damages of coal power.

Iowa's use of coal declines as wind energy rises

Proportion of total electric generation by energy source in Iowa, 2000-2024

Source: U.S. Energy Information Administration

Burning coal sends money out of the state

Coal power may feel like a locally rooted industry, but much of the money tied to it leaves Iowa. Utilities import nearly all the coal they burn, sending about $200 million each year to out-of-state mining and rail companies.

By contrast, renewable energy keeps more dollars here at home. Wind and solar projects create local construction jobs, ongoing maintenance work, and property tax revenue for communities. Instead of flowing out of state, these investments circulate through Iowa’s economy.

Hidden health costs cause hospitalizations, lost productivity

The economic costs of coal are only part of the story. Air pollution from coal plants contributes to serious health problems across Iowa, including asthma, heart disease, and premature death.

Coal-related pollution leads to about 110 early deaths and hundreds of hospital visits each year, costing $110 to $150 million annually in health impacts. These costs are often concentrated in the same communities that rely on coal plants for jobs and tax revenue, underscoring the need for a transition that works for those communities.

Renewable alternatives create in-state jobs, lower energy costs

Renewable energy is also more affordable than coal. As coal plants age and fuel costs rise, they become more expensive to operate — driving up costs for ratepayers. Wind and solar, by contrast, have no fuel costs and lower long-term operating expenses, making them a more cost-effective source of electricity over time.

These resources also create more lasting economic value in Iowa. Once built, renewable energy projects produce power for decades while supporting local jobs, land lease payments, and tax revenue. Together, lower costs and stronger local investment make the shift away from coal not just an environmental choice, but a practical economic one.

Iowa’s next chapter in energy has great potential

Four major coal power operations remain in Iowa, and they are deeply tied to local economies. Without careful planning, plant closures could mean lost jobs and shrinking local budgets.

But experience from other states and countries shows a different path is possible. With the right policies, coal communities can replace lost jobs and redevelop in ways that support long-term economic growth. Strategies like workforce training, local investment funds, and strong labor standards can help ensure the transition creates opportunity rather than disruption.

The report outlines steps that state and local decision-makers can take to advance a win-win solution for Iowa energy users and for the communities surrounding coal plants:

• Plan ahead for plant retirements with clear timelines

• Invest in workers through training and high-quality job standards

• Create a state transition fund to support communities

• Require utilities to plan for cleaner, lower-cost energy

With smart policy and community leadership, Iowa can build an energy future that is cleaner, more affordable, and more self-sustaining. The transition away from coal is already underway — the question is whether we shape it to benefit Iowans, or let it unfold without a plan.

Read the full report to explore the analysis and policy recommendations in detail.