Last week UK Coal announced a forthcoming joint venture with Peel Energy which will see 14 former colliery sites owned by the company used to erect 54 wind turbines, generating up to 133 megawatts of electricity per hour (enough to power 80,000 homes). Unsurprisingly UK Coal shares jumped 10% in response to the news - leaving me wondering why more energy companies aren’t applying similar tactics to beat the recession?

The fact of the matter is that by demonstrating a greater degree of long-term viability and preparation for the energy markets of tomorrow, UK Coal is financially a far more attractive prospect for traders and shareholders. The investment is sounder now that the company is unveiling moves that will help it compete succesfully in coming years, and in doing so is also improving its immediate current standing in a tricky situation.

The lesson seems pretty clear - obviously implementing such moves is not easy, with credit so unobtainable and cash for new ventures all but dried up, but if companies can find a way to finance such initiatives they will reap the rewards not only tomorrow, but also today. UK Coal for example is now in a better position to build on the positive shares bounce with more money in the company coffers than before - the second step will now be easier as the company tries to move forward.

Cutting jobs and closing down factories/plants/offices is another often used crisis-busting tactic, and one that often brings about a short-term recovery in share prices when times are tough (though sadly for those whose jobs are sacrificed this is of course little consolation). Sometimes such moves can represent a sensible option for companies - though it must be stressed that they represent only short term solutions, and require far more complex new strategic initiatives if a company is to continue to enjoy success in the marketplace. In other words, simply losing money at a slower rate is not an adequate fix for such problems - companies must also address positively why they individually are not performing better, and if required overhaul the nature of their operations for the demands of today.

I am pleased to see UK Coal taking steps to do so last week, and even more pleased that the market has moved to affirm the value of such measures with a share value increase, hopefully acting as a catalyst for spurning other energy companies into realising that, for them at least, the only way out of this recession and into future success, is with positive and effective renewable energy. Those that get the message I feel will be the ones still around and successful ten years from now…

Dejan Levi