Coal’s Life After Life

March 14, 2022

Above: Open-cast coal mine in Luetzerath, western Germany

5 stages of dying:

Denial, Anger, Bargaining, Depression, and finally, Acceptance.
The Coal industry is dying.

Some people say there is a tunnel of light…

Bloomberg:

Peabody Energy Corp, the biggest U.S. coal producer, is expanding into clean energy. 

The St. Louis-based company is forming a joint venture with Riverstone Credit Parters and Summit Partners Credit Advisors to develop utility-scale solar projects on land around retired coal mines, according to a statement Tuesday.

The move is symbolic for a company that’s been digging up the dirtiest fossil fuel since its founding in 1883. But it’s unlikely to mark a significant strategic shift. Peabody characterized the decision as a way to generate new revenue sources, but didn’t disclose how much it was investing in the effort. The company’s primary focus will continue to be coal.

“It would take a long time to turn that ship,” said Andrew Cosgrove, a mining analyst with Bloomberg Intelligence. “This doesn’t move the needle, financially.”

Peabody shares gained 10% to $19.09 at 10:25 a.m. in New York.

The joint venture, R3 Renewables, is focused initially on six sites in Indiana and Illinois. It expects to develop more than 3.3 gigawatts of solar projects and 1.6 gigawatts of battery storage during the next five years.

The venture will create “additional value from our existing assets,” Chief Executive Officer Jim Grech said in Tuesday’s statement. Company representatives didn’t respond to phone calls or emails Tuesday requesting further details.

“I’m not sure how much skin is in this transaction,” BI’s Cosgrove said, suggesting that one potential scenario could see Peabody provide the land and its partners take on most of the development work.

Peabody isn’t the first coal producer to expand into solar. Hallador Energy Co. said in June plans to develop as much as 1,000 megawatts of renewable power in Indiana with Hoosier Energy Rural Electric Cooperative Inc., near a power plant that Hoosier expects to retire in 2023.

Yale Climate Connections:

Centralia, Washington, long relied on jobs from a coal mine and a coal-fired power plant.

But the mine closed in 2006, and the power plant is set to be retired in three years. So Centralia’s been planning for a future without coal.

As part of negotiations about the shutdown, the company that owns the power plant agreed to invest $55 million to help Centralia diversify its economy.

Much of that money is going toward energy-efficiency projects.

“You’re talking about things like heating, ventilating, and air conditioning, and door and window replacement and insulation,” says Sean O’Leary of the Ohio River Valley Institute. “Those are the kinds of things done by local companies, local contractors, and they in turn hire local employees.”

O’Leary has been studying Centralia’s approach.

He says investing in the energy-efficiency industry is beneficial because the work is labor-intensive, so much of the money is spent on worker’s wages.

And it also helps residents save on utility bills, so they have more disposable income to spend in the community.

“And so you simply have a richer environment for companies to do business,” O’Leary says.

So he says there are many benefits to investing in energy efficiency as part of preparing for a post-coal future.

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