Owners of the equity and debt in Dynegy, which strategically placed certain units into bankruptcy, are at each other’s throats over how their assets should be divided. They would not be in this position though if they did not agree on at least one thing – there is ample value in them.

A merchant power generator that relies on relatively modern coal-fired units for around two-thirds of its output, Dynegy was felled by a collapsing “dark spread” – the margin it could earn on the wholesale price of power generally set by more flexible natural gas-fired units. After a golden era around the middle of the last decade, the collapse in gas prices as a result of the recession and the shale gas boom along with stricter emissions rules has compressed this spread to the point that older coal plants were shuttered en masse. Last year, about four times as many planned or existing coal units were mothballed as were built from 2000-2008.

But markets have a way of overcorrecting. Benchmark natural gas prices, now around $3.70 per million British thermal units, are not only a fraction of those in Asia or Europe but far too low for some shale projects to be economical. With new nuclear construction highly uncertain and carbon-free sources contributing piddling sums, coal’s loss of market share to gas should slow. In the absence of more stringent environmental regulations, the US Department of Energy forecasts that coal-fired generation will rise by a quarter between 2009 and 2035, only slightly lagging overall market growth.