Peabody Energy is planning a massive buildout of solar energy and battery storage
Peabody Energy, the largest coal company in the U.S., is launching a renewable energy development company.
Bowing to economic pressures and the reality of a new energy world, the company intends to build out 3.3 gigawatts of new solar energy and another 1.6 gigawatts of battery energy storage through a new company called R3 Renewables.
These are big numbers. A gigawatt can power anywhere from 300,000 to 700,000 homes, so 3 gigawatts is enough energy to supply a mid-sized American city.
Initially, R3 Renewables is going to focus on development of six potential sites on land near former coal mining operations in Indiana and Illinois (where there are several mid-sized American cities). All of the sites are near grid injection points and could become the largest solar energy and battery storage projects in both states, according to a statement.
"We are pleased to announce this new joint venture as part of Peabody's commitment to be the coal producer of choice, creating additional value from our existing assets, supporting our own and our customers' ESG ambitions and providing added economic benefits for the communities in which we work and live," said Jim Grech, President and CEO of Peabody.
The significance of Peabody, the world's largest private coal company, switching to developing renewable energy projects can't be overstated. It's yet another sign that renewable energy is just a more economical solution for developing power generation.
Earlier this year an Australian energy company announced that it would shut down the largest coal-fired power plant in the country years ahead of schedule because it could not operate economically. Renewable power was just too cheap and plentiful.
The projects R3 Renewables plans to develop could go a long way toward making the energy grids in two of the biggest coal-consuming states (number two and number five on the list of coal consumers) cleaner and more sustainable.
"On the financing side there's an avalanche of funding for projects that are waiting to happen," says Richard Reiss, the editor of New York's sustainability focused initiative, The City Atlas.
To be clear, the 5 gigawatts of solar and storage capacity is dwarfed by billions of tons in coal reserves and assets that Peabody Energy still develops. The company's coal is enough to keep around 1,500 power plants running for an entire year. Or the entire US fleet of coal plants running for the next five years.
According to United Nations reports, the world needs to move off of using coal power as quickly as possible, so finding alternative sources of revenue for Peabody is important for the company's future.
"We are excited to partner with Peabody and Summit Partners as we launch R3 Renewables," said Daniel Flannery, a Managing Director at Riverstone, in a statement. "As one of the world's largest private investment firms focused on energy, power, decarbonization and infrastructure, we believe we are well positioned to assist R3 Renewables to reclaim, reimagine and repower the region by pursuing these ambitious and transformative renewable energy projects."