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By Adena DeMonte

TXU, the Dallas-based utility company that has riled up environmentalists and others by proposing to build 11 new coal plants, announced Monday that it will be purchased by a group of private equity firms for $45 billion.

The purchase was led by Kohlberg Kravis Roberts & Co., Texas Pacific Group, and Goldman Sachs & Co. GS Capital Partners, Lehman Brothers, Citigroup, and Morgan Stanley intend to be equity investors at closing.

Some environmentalists are hailing this buyout as a possible win because it comes with an announcement that the company has given up plans to build eight of the 11 proposed coal-fired plants. The scale-back represents a 75 percent reduction in new coal capacity, or 56 million tons of annual carbon emissions, according to a TXU statement on the sale.

“Today marks the beginning of the end of big coal’s dominance over America’s energy future,” said Michael Brune, executive director of the Rainforest Action Network (RAN) in a statement.

Executive Editor of GreenBiz Joel Makower said that the deal is a major development because the environment became a “top line negotiating point for utility acquisition.”

“I think it puts everybody on notice that carbon is an investment risk and that utility growth going forward needs to look beyond fossil fuels,” said Mr. Makower.

The proposed TXU coal plants, along with six other proposed plants that Texas governor Rick Perry has asked to fast track, have heated up controversy about coal as an energy source. Coal is the dirtiest fossil fuel, but it has become a key player in energy production as countries strive for energy independence.

Global coal consumption is expected to nearly double from 5.4 billion short tons in 2003 to 10.6 billion short tons in 2030, according to the U.S. Department of Energy’s Environmental Information Association (EIA) International Energy Outlook for 2006.

In the U.S., coal supplies about 52 percent of electricity. It also generates 84 percent of the electricity emissions, according to the EIA. Coal emits twice as much carbon dioxide as natural gas, the cleanest fossil fuel, according to environmental nonprofit Environmental Defense.

“Up until now the coal industry believed that through their sheer marketplace power they could keep building coal plants forever,” said Mr. Makower. “I think this is a wake up call.”