The collapse of Peabody – the world’s largest private coal corporation – may speed the transition to renewable electricity generation according to Claudia Assis at Market Watch:
“Since 2010, more than a third of coal-fueled power plants have been retired or are scheduled to be retired, and the market for coal in the U.S. is shrinking. Elsewhere, countries such as China are also actively trying to curb its consumption.”
Markets for coal face a short term squeeze from the slowdown in the global economy that has left companies like Peabody with massive debts at a time when coal prices are at rock bottom. In the longer-term, the entire industry is threatened by carbon reduction targets that can only be achieved by retiring coal power stations around the world. In this climate, investors are reluctant to plough capital into an industry whose days are numbered.
While the situation will give a boost to the fast growing solar energy industry, and to renewables in general, Assis notes that the short-term beneficiaries of the demise of coal will be the global natural gas industry; which is expected to account for a third of US electricity generation by 2040.