Wanted: New Business Models for Energy Sector Companies

There’s a lesson to be learned from the near simultaneous bankruptcies of Peabody Energy, the world’s largest private sector producer of coal, and of SunEdison, the renewable energy company once-valued at $10 billion. You might think Peabody’s failure makes sense, given the declining coal industry. And you might think that SunEdison’s failure does not make sense, given the investor, regulatory, and public support for renewable energy. But these two very dissimilar companies shared a common problem: the lack of a sustainable business model. Peabody’s case shows the inability of a traditional energy company to adapt its strategy to new circumstances. SunEdison’s case displays the hubris of trying to do too much, too fast, in uncharted markets. What’s needed: new business models for both legacy and innovative companies in the energy sector.

John Howell, Editorial Director