New York - The spectacular failure of what was once the
world’s biggest renewable-energy company has turned into a smorgasbord of wind and
solar farms being gobbled up by infrastructure investors, clean-power
developers and even a vegan soccer team.
Since filing the largest US bankruptcy of 2016, SunEdison has hosted the biggest-ever sale of renewables assets. It’s shed at least
$1 billion of assets from Southern California to Chile to India, some through
record-breaking deals, including projects that would have died without new
owners.
With wind and solar supplying more than 11 percent of global
electricity, the company’s debt-induced collapse enabled competitors to
strengthen their existing hands or enter new markets.
“Developers have been picking at the carcass,” Nathan
Serota, a New York-based analyst at Bloomberg New Energy Finance, said in an
interview. “As it turns out, the carcass was not so bad.”
Based in Maryland Heights, Missouri, SunEdison amassed its
portfolio by taking advantage of clean-energy’s push into the
mainstream. Its financial engineering helped enable wind and solar to make
up more than half of all new power-plant capacity in the US in the past decade.
In the process, the company piled up $16.1 billion in
liabilities by the time it sought court protection from creditors on April 21,
a year ago next week.
Its ascent was marked by landmark acquisitions announced in
the first seven months of 2015, making SunEdison a key driver for the
clean-energy ambitions of some developing countries, including India.
Now, it’s looking at how to make a comeback. After toggling
between a wind-down and reorganisation since filing for bankruptcy, it
announced last month a rough outline for restructuring. But it’s also sold off
so many prised assets and lost key staff that questions remain about what of
value will be left.
“They’re not coming back as anything material, just the rump
or shadow of their former self,” Swami Venkataraman, a New York-based analyst
at Moody’s Investors Service, said last month.
SunEdison didn’t offer any official comment.
Bulk deals
Whether or not SunEdison prospers, its assets have found
loving owners.
Its piecemeal sales process started tentatively, but it soon
became clear that bulk transactions were preferred. That meant fewer deals, a
plus considering SunEdison had at one point marketed several gigawatts of
assets.
Read also: SunEdison in bankruptcy as growth plan unravels
That favoured large companies able to cope with large-scale
finance and project development, including the US’ largest independent
power producer, NRG Energy.
“They could look at us with a high degree of transaction-certainty,”
Craig Cornelius, NRG’s San Francisco-based senior vice president of renewables.
“Otherwise, they would have needed four different buyers for the same
portfolio.”
NRG in November bought about 1.5 gigawatts of wind and solar
projects, its biggest-ever clean-power acquisition, for as much as $183
million, depending on certain milestones. That saved three solar farms in
Hawaii that a local utility had effectively halted, citing SunEdison’s
uncertain status.
In March, SunEdison one-upped itself with twin deals that
would together represent the biggest-ever transfer of operating clean-power
plants, 4 gigawatts of wind and solar farms. Those transactions would shift its
TerraForm yieldcos to Brookfield Asset Management Inc, Canada’s largest alternative-asset
manager, valuing the two entities at $2.49 billion.
The deals would make Brookfield, the owner of about 10 700
megawatts of clean-energy plants globally, a major solar force. Brookfield
today owns a half-megawatt of solar, enough to power just 82 US homes.
SunEdison’s aggressive bids in 2015 helped drive down solar
tariffs in India, and its bankruptcy shocked the country that saw a big western
company’s presence as a vote of confidence in its renewable goals.
Greenko Energies Pvt., an Indian developer backed by
sovereign wealth funds of Abu Dhabi and Singapore, emerged to fill the void. In
January, it bought about 1.7 gigawatts of solar assets from
SunEdison, valued at about $500 million.
About 440 megawatts were in operation and another 1.2
gigawatts in development. The acquisition will help Greenko expand its
generation capacity to about 5 gigawatts in the next two years, said Mahesh
Kolli, its founder.
With insolvency looming, SunEdison sold 198 megawatts of
solar assets in Japan to BCPG. The deal accelerated BCPG’s clean-energy
efforts, which date to its 2015 acquisition of solar projects in Thailand. It
had already been evaluating Japan, and the SunEdison portfolio helped it
establish itself there.
Actis LLP, a London-based private equity firm, also used
SunEdison assets to expand with a deal this year for a 1.5-gigawatt portfolio
of Latin American solar projects. It wants to invest $525 million in renewable
energy across Latin America, with a focus on Brazil, Mexico, Uruguay and Chile.
In the UK, meanwhile, the Forest Green Rovers Football Club
Ltd., purchased SunEdison’s residential rooftop business shortly before the
bankruptcy filing.
Forest Green Rovers, a vegan soccer team based in
Gloucestershire, is owned by the clean-energy supplier Ecotricity Group Ltd.
Chairman Dale Vince, who wants his club to be the greenest in the world, is
building a new stadium made almost entirely of wood, and already uses a
solar-powered robot lawnmower.
Scale
In late December through the first quarter, SunEdison closed
more than $250 million in deals, according to a bankruptcy filing.
“What made it exceptional was the scale of the overall
portfolio -- that it included every stage of development, that it covered every
imaginable geography,” NRG’s Cornelius said. “That was the result of the
expansion SunEdison had taken.”
BLOOMBERG