US coal giant unveils giga-scale solar and battery storage plans

United States coal giant Peabody announced this week the launch of a new joint venture, R3 Renewables, which will focus on developing 3.3GW worth of solar PV and 1.6GW worth of battery storage capacity over the next five years.

R3 Renewables will initially focus on developing its new renewable assets on six potential sites on land on or near previous coal mining operations in Indiana and Illinois.

Further, the potential development sites and their proximity to existing grid injection points, present R3 Renewables with building the largest solar and battery storage projects in both Indiana and Illinois.

The R3 Renewables joint venture was created in partnership with the New York City based Riverstone Credit Partners energy sector investment platform and global alternative investment firm Summit Partners Credit Advisors.

“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.

“Both Riverstone and Summit Partners have deep experience across energy and growth sectors, and we believe R3 will benefit from their collective perspective on renewable energy solutions.”

The move comes as something of a surprise from Peabody, which is by far and away the largest coal producer in the United States and has failed to offer any signs of a coal phase-out plan.

In fact, Peabody’s “Statement on Climate Change” published on its website both acknowledges “that climate change is occurring and that human activity, including the use of fossil fuels, contributes to greenhouse gas emissions,” while also claiming “that coal is essential to affordable, reliable energy and will continue to play a significant role in the global energy mix for the foreseeable future.”

Peabody also operates numerous mining operations in Australia including the Wilpinjong and Wambo coal mines in New South Wales.

Peabody also published in 2019 the absurd “The Surprisingly Sustainable Case For Coal” white paper which claimed coal “as a sustainable energy source” which they described as “at once a straightforward statement of fact — and a provocative, even controversial, assertion” due solely to its existing dominance, tied with repeatedly disproven assumptions that renewable energy technologies cannot compete, financially or efficiently, with coal.

However, even Peabody has had to begin acknowledging the reality of coal’s decline, as it did in mid-2020 when it was forced to slash the book value of the largest coal mine in the country – the North Antelope Rochelle mine in Wyoming’s Powder River Basin—by $1.42 billion, or 22% of Peabody’s total asset value.

It bodes well, then, that Peabody has not only committed to developing such large amounts of renewable energy in previously coal dominant regions such as Indiana and Illinois, but also decided to partner with proven investment firms like Riverstone Holdings, which focus on financing decarbonisation projects.

Since its founding in 2000, Riverstone has raised $43 billion in capital, including its Decarbonisation platform, which has invested $8 billion worth of capital targeting energy transition technology, renewable energy, and decarbonisation solutions including investments in Pattern Energy and Enviva.

“We are excited to partner with Peabody and Summit Partners as we launch R3 Renewables,” said Daniel Flannery, a managing director at Riverstone.

“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.”