Ascending ACES Thriving as Coal Production Slumps

The ALPS Clean Energy ETF (Cboe: ACES) is one exchange traded fund at the right place at the right time and not just because it is up more than 30% this year.

The ALPS Clean Energy ETF tries to reflect the performance of the CIBC Atlas Clean Energy Index, which is comprised of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology.

Data confirm that domestic utilities are generating less power via coal and more with alternative energy sources, such as wind and solar, potentially representing a long-term boon for ACES and its components.

“US power generation from coal totaled 60.1 TWh in April, down 23.4% from March and 18.1% lower than the year-ago month,” S&P Global Platts reports,” citing the Energy Information Administration (EIA). “The figure was the lowest month in over 47 years, including below the previous record of 62.87 TWh generated from coal in April 1974.”

ACES’ components provide the products and services that enable the evolution of a more sustainable energy sector. The green energy companies are engaged in renewable energy sources, including solar power, wind power, hydroelectricity, geothermal energy, biomass, biofuels, and tidal/wave energy; clean technologies, including electric vehicles, energy storage, lithium, fuel cell, LED, smart grid, and energy efficiency technologies; and other emerging clean energy activities and technologies.

Data Backs ACES

More data points confirm coal’s tailspin and the benefit that brings to ACES.

“Coal made up just 20.4% of the power generation in April, while natural gas generation was at 34.9%, compared with 24.3% of US generation from coal and 34.8% from gas in March. In the year-ago month, coal’s power generation share was at 24.3%, while gas was at 33%,” according to S&P Global.

While coal use among U.S. utilities slides, data confirm renewables are replacing coal.

“Renewable’s power generation share was at 23.2%, up from 18.8% in March and 22.1% a year ago,” according to S&P Global. “It was the first time ever that power generation from renewables were higher than coal in a month. Wind generation was at a record-high 30.22 TWh in April, up 16.1% month on month and 12.9% higher than a year ago. April is typically the windiest month of the year, with an average of 23.34 TWh generated in April since 2014.”

For more information on the renewables space, visit our renewable energy category.