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.
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
It’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.
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.
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.
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 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.