Coal Resurgent, Renewables in Retreat After Trump Win

  • Date: 09/11/16
  • Javier Blas and Anna Hirtenstein, Bloomberg News

If you want a snapshot of what the global energy map will look like under President Donald Trump, look no farther than the stock market. As coal enjoys a comeback, the biggest loser could be fight against climate change.

Glencore Plc, the world’s top coal trader, surged more than 5 percent on Wednesday. Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, plunged as much as 13 percent. The swing foretells a story of fossil fuels making a comeback, while the fight against climate change — and investment in wind and solar power — languishes.

“De-carbonisation, which has been the organizing principle of Obama’s energy policy, came to a screeching halt last night,” said Bob McNally, president of consultant Rapidan Group in Washington and a former senior energy official at the White House under Republican President George W. Bush.

In his only major energy policy speech ahead of the elections, Trump said that he would rescind “job-destroying” environmental regulations within 100 days of taking office and cancel the climate deal reached last year in Paris.

“A Trump administration will focus on real environmental challenges, not the phony ones we’ve been looking at,” Trump told supporters in May in North Dakota, the birth-place of the U.S. shale revolution.

To be sure, Trump has offered few clues on how he plans to implement his plans. Energy and climate policy has taken a back-seat to immigration, the economy and debate about the candidate’s fitness for office. And some of his proposals are contradictory, like his pledge to boost both natural gas and coal, two fuels that compete against each other in the power generation market.

Yet, few doubt who’s likely to win and lose, particularly as Trump can rely on supportive lawmakers in Congress to push his agenda.

“The result is undoubtedly a blow for the renewable energy industry,” said Matt Loffman, an analyst at energy consultant Douglas-Westwood in Houston. “The historic election result is perhaps welcome news for a hydrocarbon industry that has been on the ropes for over two years.”

Coal prices already are enjoying a renaissance after China, the world’s largest consumer, cut domestic production, forcing power plants to buy overseas. The cost of thermal coal in the Australian port of Newcastle, a benchmark for Asia, has more than doubled since January to a four-year high of $114.75 a ton.

Shares of big coal miners such as Anglo American Plc, BHP Billiton Plc and Rio Tinto Plc rose between 2 percent and 4 percent on Wednesday. Wind turbine makers Gamesa Corp. Tecnologica SA and Nordex SE fell. Solar panel makers plunged in New York, led by SunPower Corp., First Solar Inc. and Canadian Solar Inc.

As coal enjoys a comeback, the biggest loser could be fight against climate change.

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