NewEnergyNews: ORIGINAL REPORTING: A WHOLE NEW KIND OF RENEWABLES BUSINESS

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

  • FRIDAY WORLD HEADLINE-World Gets A Step Closer To Enforceable Climate Laws
  • FRIDAY WORLD HEADLINE-New Energy Ready To Power The World Future
  • FRIDAY WORLD HEADLINE-Sahara Sun Could Power The World
  • FRIDAY WORLD HEADLINE-World’s Biggest Offshore Wind Turbines Building Off UK Coast
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, September 22:

  • TTTA Thursday-Why Having Babies Could Be The Climate Change Answer
  • TTTA Thursday-Big Texas Wind Backed By Amazon
  • TTTA Thursday-Big Sun Sparkles In Nevada
  • TTTA Thursday-EV Racing Coming To The Streets Of Brooklyn
  • THE DAY BEFORE THE DAY BEFORE

  • ORIGINAL REPORTING: In The Wake Of The Massive Aliso Canyon Leak
  • ORIGINAL REPORTING: The Rise Of Distributed Energy Resources Goes On
  • ORIGINAL REPORTING: Community Solar Matures And Evolves
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: A Snapshot Of U.S. Solar Right Now
  • QUICK NEWS, September 20: Survey Shows People Oppose Fossil Fuels; Solar Bargain Hits World Record; China In Record Wind Build Rate
  • AND THE DAY BEFORE THAT

  • TODAY’S STUDY: A Utility Puts Out Its Vision Of New Energy On A New Grid
  • QUICK NEWS, September 19: People Will Pay To Fight Climate Change; Wind To Keep Getting Cheaper; Tesla Batteries To Ease Aliso Cyn-Caused Power Shortfalls
  • THE LAST DAY UP HERE

  • Weekend Video: This Is Decade Zero But It’s Not Too Late
  • Weekend Video: U.S. Offshore Wind Gets Real
  • Weekend Video: Grid 3.0 And The New New Energy
  • --------------------------

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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, September 24:

  • Good News On Climate – The Public Is Starting To Get It
  • The Libertarian Failure On Climate Change
  • New Energy Is Doable – And Is Being Done

    Wednesday, March 04, 2015

    ORIGINAL REPORTING: A WHOLE NEW KIND OF RENEWABLES BUSINESS

    A whole new kind of renewables business: Inside the SunEdison-First Wind deal; The world’s biggest clean energy developer will offer 24-7 clean energy to utilities

    Herman K. Trabish, November 23, 2014 (Utility Dive)

    SunEdison’s $2.4 billion buy of First Wind is far more than the merging of a solar company and a wind company into the world’s biggest renewable energy developer.

    It is the beginning of a whole new way for the power system and utilities to think about renewable energy.

    “We should sell a renewable product, 8000 hours per year, 24 hours per day, that combines hydro and wind and solar and whatever,” said First Wind CEO Paul Gaynor. “That would create real breakthroughs on displacing gas and coal and hitting those big market share numbers.”

    International powerhouse solar developer SunEdison and its YieldCo TerraForm Power acquired First Wind in a complex 3-way deal that raises their combined 2015 development expectation to between 1.6 gigawatts and 2.3 gigawatts and their combined international project pipeline to 8 gigawatts.

    On the strength of the deal, TerraForm increased its expected 2015 per share dividend 44% from $0.90 to $1.30 per share. The YieldCo investment vehicle, which just added 32% in value through its July IPO, will now have First Wind’s 521 megawatts of operating projects’ expected cash returns of $72.5 million to disperse as dividends.

    Why do the deal?

    First Wind’s driver in the deal was that its two long-time private equity backers were maxed out, Gaynor said, while its management foresees “a phenomenal amount of growth ahead of us in both wind and solar.”

    On the SunEdison side, its leaders saw the potential of 1 gigawatt to 2 gigawatts of wind development but wanted a partner that knew the space, CEO Ahmad Chatila said. The new company’s 2013 to 2020 compound annual growth rate (CAGR) in solar is projected at 17% and its wind business CAGR for the same period is projected at 11%.

    Gaynor will run SunEdison’s U.S. wind and utility-scale solar businesses and lead wind development internationally, he explained. Because the deal combines SunEdison’s in-country knowledge and First Wind’s domain knowledge, “the First Wind team can now start to think about life beyond the U.S. borders, where there is a lot going on.”

    The new partners share a commitment to the build-and-hold business model that, according to SunEdison, provides three times the value proposition of the build-and-sell model. Project ownership also adds an operations and maintenance opportunity that both Chatila and Gaynor expect to expand.

    The hedge value of international expansion is a big part of why the SunEdison leadership expects to “blow past” U.S. policy obstacles. With new divisiveness in Congress emerging, there are serious uncertainties about U.S. wind's federal production tax credit and the revision of U.S. solar's federal investment tax credit.

    The YieldCo

    The YieldCo offers still another revenue path because new assets will attract investment that can be re-circulated into further project development.

    “The deal is incredibly complicated but Sun Edison couldn’t have done this without it,” Gaynor said. “The YieldCo is a source of capital that is incredibly important in making it work.”

    The YieldCo is an asset class that is growing because people like the relatively low risk nature of solar and wind and, with the more mature MLP market at $300 billion or more, there is a lot of room for YieldCo growth with the same kind of investors, Gaynor said. “That makes wind and solar more competitive because it brings the cost of energy down,” he explained, “and a low cost of capital is an absolute key success factor in bidding on renewables projects.”

    A new kind of renewables

    But Gaynor’s long term vision is of a new kind of renewables offering. “We need to transition, as an asset class, to selling the renewable product 24 hours a day,” he said. “Instead of a 20-year PPA [power purchase agreement] for wind only or solar only, what the utility should really want is an around the clock solution.”

    First Wind has been talking to utilities in the northeast, including Connecticut Power & Light and National Grid in Massachusetts and Rhode Island, about what it calls a "clean firm" product. “It merges Canadian hydro resources, either from Newfoundland-Labrador or Quebec-Ontario, and New England wind into one transmission asset delivered to urban centers,” Gaynor explained. “That brings the delivered cost of energy way down. That’s where the magic happens.”

    The generation source would be up to the power producer. “The utility sees one product, 1,000 megawatts of clean energy per hour,” he said. “One hour it could be from 1,000 megawatts of wind. The next hour it could be half hydroand half wind.”

    By eliminating fuel prices and suppressing natural gas price volatility, First Wind calculates that a 1,000 megawatt PPA would save Massachusetts ratepayers an annual $1 billion of the $6 billion they spend every year for electricity. “When you can go to a politician or state utility commissioner and offer a big renewable project that could save consumers a billion dollars per year, they stop and listen.”

    Though the PPA structure and transmission agreements have not been worked out in detail, “utilities like the concept,” Gaynor said. “Between now and the end of this decade, those types of opportunities will be real.”

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