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Energy economists have long argued that energy systems need to be adaptable in the face of shocks. In the early twentieth century, Denmark embodied the opposite, with its industry almost entirely dependent on imports of coal from the UK. Towards the end of the First World War, however, and well into the 1920s, coal imports became expensive and more difficult to obtain. Local diversification was possible, however, through peat. We exploit detailed microlevel data from butter factories, covering the period 1900–28. Employing an event study approach, we find significant productivity advantages for firms closer to available peat fields in the wake of the coal shortage, and that these gains persisted even when peat was no longer used. Our results thus suggest that public policy might aim to support adaptability for firms less able to transition to more sustainable energy if that is the price of longer-term efficiency and survival.