SMART MONEY GETS IN THE WIND

More sophisticated investors looking to buy wind assets in 2012

Abby Gruen, April 18, 2012 (SNL Financial)

“…Strategic investors, including Everpower Wind Holdings Inc., MidAmerican Renewables LLC, GE Energy Financial Services, Atlantic Power Corp. and Algonquin Power Co., have access to the capital markets and bank markets, and are buying more developed properties than in years past…It is expected to be a tougher market than ever for developers to get power purchase agreements, and for those who lack committed buyers for their projects' energy, there will be more pressure to partner with larger players to get their deals done…

“…Investors are looking for near-term buildable assets, compared to a number of years ago when they were looking for development pipelines, because many strategic investors have platforms they want to add assets to…Investor-owned utilities in particular are buying a growing share of installed wind capacity and their nonregulated affiliates will continue to make acquisitions, even as the market slows at year-end…Given the capital intensive nature of the business there are more joint ventures and partnerships in financings…”

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“The tax equity market grew 25%, with more than $6 billion raised in 2011…[M]ore than half of tax equity investors elected to use the PTC, over the cash grant, or investment tax credit…Capacity factors weigh in more now because the towers are taller and the blades longer, so they have greater capacity, so the PTC over time could be a better choice…

“Everpower Wind is a subsidiary of Terra Firma Capital Partners Ltd. MidAmerican Renewables is a subsidiary of Berkshire Hathaway Inc. GE Financial Services is a subsidiary of General Electric Co. Algonquin Power is a subsidiary of Algonquin Power & Utilities Corp. BlackRock Alternative Investors is an investor platform for BlackRock Inc. and NTR plc. JP Morgan Capital Corp. is a subsidiary of JPMorgan Chase & Co.”