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October Top 10 Players in Green Energy

1: Can BrightSource Energy’s John Woolard do anything wrong?

BrightSource Energy’s chief executive was a deal-making machine in October, notably gaining a $300 million investment by NRG Energy in the Ivanpah solar project and inking a partnership with French company Alstom to build power plants in Europe, the Middle East and North Africa. The company also won approval from the U.S. Bureau of Land Management for the 392-megawatt Ivanpah project in California an accomplishment that not long ago seemed like it might elude the company in the face of opposition from conservationists. As other superstars of green energy have faded Solyndra, in particular, has drastically scaled back its ambitions Woolard is moving projects forward, finding funding and looking even further afield, to Australia and South Africa, for friendly markets. Woolard told G.E.R. in June, Everybody in our company has built power plants and assets before and understands what it takes. He’s proving it.

2:� Google

Google began its venture into green energy years ago by investing in a few choice companies a mere toe dipped into the vast ocean of the energy industry. The early investments were followed up with direct funding for projects and power purchase agreements. Then, in October, the Moguls of Mountain View plunged into the deep blue sea by supporting the development of a 6-gigawatt electric transmission line that would stretch from New Jersey to Virginia and bring energy created by offshore wind turbines to the shore.

Google has reportedly invested tens of millions a pittance for the search giant in the early-stage development project with private equity firm Good Energies and Japanese industrial group Marubeni. The project has a price-tag of $5 billion and would face enormous regulatory hurdles. But the point is that Google is still willing to dream big and think about the long-term energy needs of the nation at a time when the government itself has shied away from grand dreams of energy independence.

3: Enel, First Wind and the struggling green IPO market

Wind TurbineIt’s been a rough month for clean energy companies seeking to raise funds on public markets. Enel Green Power’s long-awaited IPO ended up raising just short of $2.6 billion ($3.5 billion), far less than then $4.9 billion it had at one point said it could raise. Enel actually fared better than Boston-based First Wind. The wind farm developer outright canceled its $300 million IPO. First Wind CEO Paul Gaynor pulled the plug on the share offering rather than sell them at a steep discount. The struggle for renewables reflects the fact that they are quite capital-intensive, in a world that is capital-constrained, and face regulatory uncertainty, Robert Clover, alternative energy equity analyst at HSBC said. Add ongoing low natural gas prices and uncertainties over the future of key U.S. subsidies and one can understand why these days green IPOs are struggling.

4: BP

Everyone loves a comeback and so it is the case with BP, which was, not long ago, the world’s greatest corporate villain. The oil major has a long way to go before it bounces back from the Macondo oil well disaster but steadily building its renewable energy portfolio is a sure way to get back some of its green cred. When BP’s wind power unit lined up funding for the 250-megawatt Cedar Creek II wind farm project it was certainly a step in the right direction. BP, as we wrote last month, is one of the few companies that can make large green energy projects happen. And despite receiving some bad PR for their green energy moves, notably relocating a solar manufacturing plant from the U.S. to China, the company has been steadily investing in renewables. Hopefully, it will continue.

5: Mauricio Quintana, Clipper Windpower

Clipper Windpower, the California turbine maker, was having a tough time navigatingan overall downwind market. Its wind developer clients unable to fund their projects were curtailing payments for existing orders and, needless to say, it wasn’t booking any new clients that could offset these delayed payments. Faced by this sour state of affairs, Clipper CEO Mauricio Quintana spearheaded last month’s buyout of United Technologies. The timely purchase has given Clipper and its promising turbine technology another lease on life. Indeed, now backed by its cash-rich parent company, Quintana is confident he’ll be able to oversee a drastic turnaround. He told us that over the next three years he plans to double company revenues to about $1 billion by acquiring competitors and growing sales in key emerging markets. The sector is ripe for consolidation, Quintana says, and if an opportunity presents itself, we will definitely take a look at it.

6: Guy Hands, Terra Firma

As Guy Hands, the founder of UK private equity firm Terra Firma, was fighting it out with Citi in a New York court over a media investment gone sour, in London, the home office was busy growing its green portfolio. Last month the fund agreed to pay $670 million ($931 million) for Italian solar operator Rete Rinnovabile. The purchase followed last year’s $112 million ($184 million) acquisition of UK wind company Novera by Terra Firma portfolio company Infinis Energy and a $350 million investment in U.S. wind farm developer Everpower. With a slew of small, cash-hungry developers, in the U.S. and Europe, putting themselves up for sale, Hands’s green shopping spree might just be starting.

7: David Crane, CEO NRG Energy

These days NRG Energy CEO David Crane is working hard to cleanup his company’s coal-heavy power generation portfolio and he’s bet that solar generation will help him do that. Just this month the New Jersey company invested $300 million in BrightSource Energy’s 392 megawatts Ivanpah project. Depending on the project’s final costs, NRG could end up controlling up to 60 percent of the power plant. This is just a start, though. In a recent call Crane told a group of Wall Street analysts that his company was planing to invest as much as $600 million over the next four years to add 500 megawatts of new solar capacity.

8: Green-Ibanking

Money

A number of investment banks are forming dedicated green banking groups, eager

to secure lucrative fees from clean energy and cleantech companies as IPO underwriters or merger and acquisition advisors. UBS, the Swiss banking giant,launched its dedicated renewable energy group last month, so did Lazardand Morgan Stanley before that. Just this year UBS advised solar-cell maker Solaicx as part of its sale to MEMC Electronic Materials and was also involved in BP’s $100 million acquisition of Verenium’s biofuels business. UBS is also an underwriter in the announced IPO of Englewood, Colo., biofuel maker Gevo. As for Lazard, it led the private placement of Amonix, the maker of concentrated photovoltaic (CPV) systems. Morgan Stanley is advising solar company BrightSource Energy on its potential IPO… Let the fees (and bonuses) roll in.

9: CalPERS

The green energy sector has plenty of big-time investors Khosla Ventures, Kleiner Perkins Caufield & Byers, Google but now it has THE investor. In October, the California Public Employees Retirement System (CalPERS), one of the world’s largest pension funds, hired Capital Dynamics of Switzerland to manage its $480 million Clean Energy and Technology fund. The move anchors CalPERS, which has $216 billion under management, as a long-term green investor, which is exactly what the sector has lacked and needed.

10: Tessera Solar

Tessera's SunCatcher system

Tessera Solar, the cutting-edge solar developer backed by Irish green conglomerate NTR, finally clinched a crucial federal permit greenlighting construction of its 709 megawatt Imperial Valley project. The permitting process is a long and unglamorous process that – badly managed – can break a project. Getting fully permitted is an achievement in its own right. But now for the next hurdle: securing the dollars that will actually get Tessera’s power plant built.

October Top 10 Players in Green Energy

1: Can BrightSource Energy’s John Woolard do anything wrong?

BrightSource Energy’s chief executive was a deal-making machine in October, notably gaining a $300 million investment by NRG Energy in the Ivanpah solar project and inking a partnership with French company Alstom to build power plants in Europe, the Middle East and North Africa. The company also won approval from the U.S. Bureau of Land Management for the 392-megawatt Ivanpah project in California – an accomplishment that not long ago seemed like it might elude the company in the face of opposition from conservationists. As other superstars of green energy have faded – Solyndra, in particular, has drastically scaled back its ambitions – Woolard is moving projects forward, finding funding and looking even further afield, to Australia and South Africa, for friendly markets. Woolard told G.E.R. in June, “Everybody in our company has built power plants and assets before and understands what it takes.” He’s proving it. Continue reading October Top 10 Players in Green Energy

The Week In Green Energy: Got Projects, Need Funding

MoneyThere’s a trend that’s been fueling a lot of merger and acquisition deals, not just this week but over the past couple of years (since the dark days of September 2008). It goes something like this: Small, promising renewable energy developer with promising technology or project pipeline but a balance sheet too thin to interest banks and secure debt financing needs long-term capital. In steps a larger company, eager to boost its green investments and with the steady revenue and attractive balance sheet the developer is missing.

Access to long-term funding has motivated lots of deals over the past couple of years between small, venture-backed renewable energy companies and much larger industrial groups. Continue reading The Week In Green Energy: Got Projects, Need Funding

The Week In Green Energy: Storms on the Horizon?

Week of May 17 – to – May 21, 2010

Jonathan Nelson, CEO Providence Equity Partners on Charlie Rose this week defending his industry as Congress debate a plan to place higher taxes on partnerships involved in private equity, venture capital and real estate.

Could the House help siphon off the venture capital dollars, which over the past few years have helped sustain cutting-edge renewable energy companies?  As Congress pushed this week to pass legislation that would tax the gains partners at private equity and venture capital funds earn for their investors, also known as carried interest, the private capital industry was fighting back. Lobbyists in Washington warned that the tax hike would swamp growth of startups developing much-needed technologies.  As is carried interests are taxed at the low, 15 percent capital gains rate. Congress wants to change that (and it’s looking more and more like it will) and tax these profits at the higher 35 percent income tax rate.

On the specifics of the legislation being debated in Congress, PeHUB Editor Dan Primack notes that under the House bill 25 percent of carried interest would be taxed as capital gains and the remaining 75 percent as ordinary income. The new tax regime would not go into effect until the beginning of 2013.

Continue reading The Week In Green Energy: Storms on the Horizon?

Infinis Acquires Scottish And Southern Energy Windfarm For ?53.8M

Infinis, the clean energy company backed by London private equity firm Terra Firma, announced today its acquisition of Scottish and Southern Energy’s (SSE) wholly-owned 30-megawatt Ardrossan Wind farm for ?28.1m ($40.5 million) in cash and outstanding debt of ?25.7m. The total transaction is valued at ?53.8m.

Continue reading Infinis Acquires Scottish And Southern Energy Windfarm For ?53.8M

Wind Power Co. Novera Energy Accepts Infinis Energy’s Improved Offer

Picture 2In the end Novera Energy was left with no choice but to accept Infinis Energy’s takeover offer.

Late last week Infinis, which is owned by private equity firm Terra Firma, acquired a 3.5 percent stake from a shareholder for 77-pence-a-share (a few days earlier it had increased its offer to 75 pence).  The 3.5 percent stake took Infinis, which already owned 47 percent of the company, over the 50 percent threshold, rendering the bid unconditional.

Infinis’ 77-pence offer, values Novera at about ?112 million ($184 million), a steep discount from the 90-pence-a-share Infinis was reportedly willing to pay for Novera more than a year ago and the 86-pence-a-share some analysts said represented a “fair valuation” for the company. Continue reading Wind Power Co. Novera Energy Accepts Infinis Energy’s Improved Offer

Infinis Energy Doesnt Give Up, Sweetens Novera Energy Bid

British renewable energy company Infinis Energy sweetened its offer for UK wind generation company Novera Energy to 75-pence-a-share, from an original 62.5-pence-a-share October offer. The new bid values the company at ?108.6 million  ($181.3 million).

Novera did not turn down the offer, and says it is “considering” it. Continue reading Infinis Energy Doesnt Give Up, Sweetens Novera Energy Bid

Old School Deal Making Shakes Up Cleantech

Wind Farm #1 The global economy is showing signs of a rebound, governments are massively investing in clean energies, and the implementation of Renewable Energy Standard (REB) in the U.S. and other key industrialized nations seems more and more likely. Given that, one can understand why UK clean energy developer Novera Energy (LSE AIM: NVE) flatly turned down a ?90.5 million ($145.2 million) bid from Infinis Energy earlier this week.

Unless it’s September 2008, you’re Lehman Brothers, and the economy is falling off a cliff, the rules of dealmaking — and fiduciary duty — require that the target company holds out for a best offer, especially if you’re in an “it”sector like cleantech.

What does Novera bring to the table? WIND. “That’s where the value is,” a source tells us. Novera owns two operating wind farms with 44.5 megawatts in combined capacity. It also has 140 megawatts of wind projects that have either been permitted or are in the planning stage. The company also has landfill gas and hydro generation, but its core business is wind farm development. All of Novera’s assets are UK-based. Continue reading Old School Deal Making Shakes Up Cleantech

Old School Dealmaking Shakes Up Cleantech Industry

Wind Farm #1 The global economy is showing signs of a rebound, governments are massively investing in clean energies, and the implementation of Renewable Energy Standard (REB) in the U.S. and other key industrialized nations seems more and more likely. Given that, one can understand why UK clean energy developer Novera Energy (LSE AIM: NVE) flatly turned down a ?90.5 million ($145.2 million) bid from Infinis Energy earlier this week.

Unless it’s September 2008, you’re Lehman Brothers, and the economy is falling off a cliff, the rules of dealmaking — and fiduciary duty — require that the target company holds out for a best offer, especially if you’re in an “it”sector like cleantech.

What does Novera bring to the table? WIND. “That’s where the value is,” a source tells us. Novera owns two operating wind farms with 44.5 megawatts in combined capacity. It also has 140 megawatts of wind projects that have either been permitted or are in the planning stage. The company also has landfill gas and hydro generation, but its core business is wind farm development. All of Novera’s assets are UK-based. Continue reading Old School Dealmaking Shakes Up Cleantech Industry

PE Fund Terra Firma Acquires New York Wind Developer

picture-1London private equity firm Terra Firma has acquired EverPower Wind Holdings, a New York-based developer with projects either in operation or development in New York, Pennsylvania, Ohio. Oregon and California. For more on the company’s projects, see here.

The London-based private equity firm, founded in 2002 by Guy Hands, paid $350 million for the company and its pipeline of? projects, reports The Wall Street Journal.

The sale to Terra Firma is expected to cash out Good Energies, which last Fall, at the height of the financial debacle, invested $55 million in EverPower. Company management, which controls 55 percent of the company is expected to stay on board.

Clean energy developers have not been on the radar screen of many private equity funds. But that could change because of the renewed positive outlook by investors in the U.S. clean energy market, which is poised to receive billions of dollars in government support as part of the Obama administration plan to green the country’s energy infrastructure. The stimulus law, passed earlier this year, has alone earmarked some $37 billion for the Department of Energy. So far only about $450 million has been spent, according to the DOE.

Back in July, Treasury, which will administer the distribution of some of the clean energy monies, released much awaited rules on this funding program, which includes a first-of-its-kind $3 billion direct cash grant program that developers will be able to tap into to finance up to 30 percent of a single green power project.

Also, with stimulus monies only available to developers with projects that either go in service in 2009 or 2010, or if construction on the projects start in 2009 or 2010, GER predicts that independent developers with projects that fit this time frame will become prime acquisition and investment targets.

The American Wind Energy Association says that this year alone the U.S. is expected to add some 5,000 megawatts of new wind capacity.