Welcome to the archives for NewsTalk, an IBJ blog published from November 2007 through December 2010.

'Dirty' coal getting reprieve on Wall Street

March 17, 2010

Indiana and other Rust Belt states have taken a beating over their power plant emissions, but Wall Street is betting coal will win out over some alternative energies in the near term.

Bloomberg News reports that coal stocks are rising while shares of solar-panel companies are falling. The article says the Stowe Global Coal Index, which tracks 38 producers, logged a small gain last year while Bloomberg’s Global Leaders Solar index dropped.

A big majority of analysts who follow Peabody Energy Corp., a St. Louis coal company that operates mines in southwestern Indiana, have “buy” ratings on the stock.

Far fewer analysts who follow Tempe, Ariz.-based First Solar Inc., the largest manufacturer of thin-film solar panels, advise buying that stock. (Incidentally, First Solar CEO Rob Gillette holds a finance degree from Indiana University.)

Why are “dirty” coal stocks rising so fast? Perhaps because governments aren’t throwing enough support behind renewable energy, or because rising international competition is crushing solar-panel profits. Failed talks in Copenhagen to limit carbon emissions is another reason.

If coal gets a breather, Indiana might have a chance to build more “clean-coal” power plants like the $2.4 billion gasification project Duke Energy is considering at Edwardsport in southwestern Indiana. Gov. Mitch Daniels and members of his administration have said the state has little realistic choice but to find ways to use its cheap, abundant coal; otherwise, a competitive advantage of cheap electricity will be lost.

How do you feel about coal? Should Indiana bet its future on the mineral?

What about overall progress on wind, solar and other alternative energy? Is it coming fast enough?


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