The Climate Pledge issued by the White House in June put
aggressive goals into place, many of which will take years to sort
out. One immediately impacted area, however, is the coal industry.
President Obama announced that there will be no more public funding
for coal plants anywhere in the world, unless they can capture the
A few pundits predict lingering momentum, with sources such as the
US Energy Information Association (
) believing that coal has a few more good years left in it. There
is also speculation that exports of coal from the Northwest US to
negate the Pledge
, however, the reality is that coal prices along the Pacific Rim
are already falling. "At this point," writes
, "early investors in the three remaining Northwest coal terminal
projects must be sweating bullets."
The message on Wall Street supports the notion that long-term
investors should flee coal. Some utilities are already running, not
walking, away. According to the Sierra Club's "Beyond Coal"
campaign, utilities have announced the retirement of over one-sixth
of the country's coal plants since 2010. The city of Los Angeles
said recently that it would lower its dependence on coal from 40%
to 0% by 2025. The drumbeat is building.
), a Nevada-based utility with a terrible record among its
coal-powered plants, announced a plan to shutter these plants over
the next twelve years. This power generation would be replaced 60%
with natural gas and 40% with alternatives such as wind, solar, and
While regulators are debating this transition, Warren Buffett gave
it two thumbs up. MidAmerican Energy, a utility subsidiary of
(NYSE:BRK.A), agreed to buy NV Energy in late May. Earlier in the
year, MidAmerican announced a settlement in which it agreed to
close seven coal-fired boilers and build a large solar
installation. MidAmerican already has the distinction of being the
largest utility-owner of wind installations and is now building the
largest solar plant in the country.
This kind of momentum has opened the door for
efforts; the development of new technologies will swing it open
wider. Growing acceptance of solar and the emergence of innovative
financing programs for homeowners have created a booming business
for photovoltaics. Over the first three months of this year, the
use of solar to generate electricity rose by 185% over last year.
Coal, meanwhile, has seen its share of the utility market fall by
25% since its peak in 2007.
If we are to believe David Crane, President and CEO of
NRG Energy, Inc.
), other developments will soon contribute to this decline. Mr.
Crane said in this
Wall Street Journal
that "all the natural gas industry needs is a gizmo in the basement
of your house to convert your natural gas into electricity. I have
no doubt that within the next 12 to 24 months, there's going to be
a technological breakthrough."
While we are moving to different sources of generating our
electricity, maybe the most interesting development will be the
creation of nearly net zero energy buildings (nZEB). The simple
fact is that more efficient technologies are allowing us to use
less electricity than ever before. The US used less electricity
last year than it did in 2005. With added financial incentives,
analysts from Lux Research believe that this sector will grow from
buildings covering 129 million square feet to 861 million square
feet over the next five years and create a materials market worth
Companies that help reduce consumption of electricity will be a
major part of this movement. For example,
) is making an impact in the LED space as a manufacturer of LED
chips and components that are sold to other manufacturers (such as
), which produce finished LED bulbs.The company is an entrenched
supplier and is also making a strong push into the residential
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