On Friday, the third-largest coal company in the U.S. filed for bankruptcy. Cloud Peak Energy is the fourth company to file for bankruptcy in recent years in Wyoming – the nation’s top coal-mining state. That comes as demand grows for cheaper natural gas and renewable sources of energy.
Energy insider Matt Smith, director of commodity research for ClipperData, says this shift is happening in the U.S. and abroad. Last week, the U.K. did not use coal for energy production for the first time since 1882. Going coal-free has been a goal for the U.K., as part of its work to address climate change.
“The reason they were able to get to this was because the share of coal has dropped so much in the generation mix,” Smith says. “It was about 40% about half-a-dozen years ago. Now it’s down to 5%, and they think it’s gonna be completely removed by 2025.”
Smith says the switch to renewable fuels began in Europe as a response to the Fukushima nuclear disaster in Japan. Historically, Europe has relied on fossil fuels and also on nuclear energy.
For its part, the U.K. has moved toward generating more power through offshore wind turbines.
Smith says going a week without coal isn’t a possibility for the U.S., at least not yet. But in April, consumption of renewable energy in the U.S. outpaced that of coal for the first time.
“The reason this happened is somewhat because of the seasonal patterns,” Smith says. “Hydropower is really strong in the spring because you have all that snowmelt; you’ve had coal plants going through maintenance; wind power is seasonably strong as well.”
Even in Texas, renewable sources of energy are becoming more popular, Smith says. Wind and solar account for eighty percent of the new energy sources providing power to Texas’ grid.
Written by Shelly Brisbin.