February 28, 2018 Read More →

Coal Producers Seek to Stem Tide of Plant Closures

S&P Global Market Intelligence:

U.S. coal supporters are split on how best to improve the outlook of a fuel with a shrinking domestic customer base.

Coal prices remain pressured as plants continue to retire and are not replaced with new capacity. With a pro-coal White House now backing the idea of bringing back coal but market headwinds against coal persisting, the sector is divided over whether the solution is pushing new coal plants, preserving the current fleet or both.

“Number one, let’s protect the fleet,” Joseph Craft, president and CEO of U.S. thermal coal producer Alliance Resource Partners LP, said on a recent earnings call. “Number two, let’s look to see if we can’t replace our older inefficient plants with newer efficient plants so that we can have the lower-cost energy that would still be environmentally acceptable.”

Peabody Energy Corp., a miner with U.S. and Australian coal assets, said in a February presentation to investors that it had no new plans for greenfield development in the U.S. but expects its product to compete against other producers in the face of a “slow secular decline” in U.S. coal demand. In line with his previous calls for a moratorium on retiring coal plants, Peabody President and CEO Glenn Kellow said the company is working to “preserve coal plants from premature retirement.”

Avoiding coal plant retirements was also at the top of a list of principles the American Coalition for Clean Coal Electricity submitted to the U.S. Environmental Protection Agency on Feb. 26 hoping to guide regulators in replacing the Obama administration’s Clean Power Plan.

More ($): US coal sector’s customers dwindling, but some hoping new plants on horizon

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