Member Q&A: Declan Flanagan, Lincoln Clean Energy

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017.

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February 27, 2018
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Member Q&A: Declan Flanagan, Lincoln Clean Energy

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017. You can hear from Declan and a host of other top names in the US wind market at our Financing Wind New York conference on 30th May.

Here are the full details:
http://financingwind.com/

DeclanFlanagan-2

What are you doing in the US?

I came here in 2003 to set up Airtricity’s North American business, which we sold to E.On for $1.4bn in 2007. I then was CEO of E.On’s North American business from 2007 to 2009 and, at the end of 2009, set up Lincoln Clean Energy. For the first five years, Lincoln was a straight-up developer of large-scale wind and solar, but now we develop, own and operate.

Why did you change strategy?

At the end of 2015 we did a deal with I Squared Capital, which acquired the business. There is more value for us in staying in our projects for longer, and this deal means we can build, own and operate. We currently have 500MW under construction where we are 100% equity owner.

We also announced at the time a plan to deploy $250m in equity by 2018, and we’re on track to do that. We’re looking to build around 500MW per annum. Our next projects coming up in Texas and SPP are 300MW and 220MW, which will be in the market in the next six to 12 months.

Which are your current projects?

We’ve got the 250MW Willow Springs in Texas, which achieved its $330m financial close in April, and the Amazon Wind Farm Texas, which is 253MW. [Update: These two developments were commissioned in November and October respectively]

These are typical of what we’ve been doing for the last four years, totalling a little over 1.5GW. In the future, the core of our business will be wind farms of 250MW or more in the ‘wind corridor’, from Texas through SPP.

Are you concerned about the end of the wind production tax credit [PTC] from 2020?

No and yes. No, in so far as this business has always been about near-term execution, in the face of a 12- or 24-month PTC window, which is far from ideal. With the five-year window, the attention from the industry should be to build as many projects as we can in that time.

That said, there is a lot of focus at the national associations on the policy framework beyond the PTC, while bearing in mind that the US market is much more driven by state policy than federal policy.

So you are confident?

I’ve been in this industry a long time and a lot of people thought it might plateau in terms of the efficiency of the technology, but in the last four years we’ve still seen huge gains. That’s amazing. Continuing with that is the most important thing we can do as an industry. There’s a lot of potential to continue to drive efficiencies.

We are also seeing a lot more capital seeking development risk as a way to enhance returns, because an operating project is commanding very low costs of capital in today’s market.

How big is your team?

We have 18 people and have been about that level for five years. We have a very heavily outsourced execution model where, in a mature market, we can complement our own expertise with skills in construction management, in operations, and in asset management.

We’re not planning any big step changes. We might see some solar come through, but it will always be a smaller part of our business than wind.

Interested in learning more about the North American wind market? Download our free ebook, 5 Lessons on the North American Wind Business, by clicking below.

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017. You can hear from Declan and a host of other top names in the US wind market at our Financing Wind New York conference on 30th May.

Here are the full details:
http://financingwind.com/

DeclanFlanagan-2

What are you doing in the US?

I came here in 2003 to set up Airtricity’s North American business, which we sold to E.On for $1.4bn in 2007. I then was CEO of E.On’s North American business from 2007 to 2009 and, at the end of 2009, set up Lincoln Clean Energy. For the first five years, Lincoln was a straight-up developer of large-scale wind and solar, but now we develop, own and operate.

Why did you change strategy?

At the end of 2015 we did a deal with I Squared Capital, which acquired the business. There is more value for us in staying in our projects for longer, and this deal means we can build, own and operate. We currently have 500MW under construction where we are 100% equity owner.

We also announced at the time a plan to deploy $250m in equity by 2018, and we’re on track to do that. We’re looking to build around 500MW per annum. Our next projects coming up in Texas and SPP are 300MW and 220MW, which will be in the market in the next six to 12 months.

Which are your current projects?

We’ve got the 250MW Willow Springs in Texas, which achieved its $330m financial close in April, and the Amazon Wind Farm Texas, which is 253MW. [Update: These two developments were commissioned in November and October respectively]

These are typical of what we’ve been doing for the last four years, totalling a little over 1.5GW. In the future, the core of our business will be wind farms of 250MW or more in the ‘wind corridor’, from Texas through SPP.

Are you concerned about the end of the wind production tax credit [PTC] from 2020?

No and yes. No, in so far as this business has always been about near-term execution, in the face of a 12- or 24-month PTC window, which is far from ideal. With the five-year window, the attention from the industry should be to build as many projects as we can in that time.

That said, there is a lot of focus at the national associations on the policy framework beyond the PTC, while bearing in mind that the US market is much more driven by state policy than federal policy.

So you are confident?

I’ve been in this industry a long time and a lot of people thought it might plateau in terms of the efficiency of the technology, but in the last four years we’ve still seen huge gains. That’s amazing. Continuing with that is the most important thing we can do as an industry. There’s a lot of potential to continue to drive efficiencies.

We are also seeing a lot more capital seeking development risk as a way to enhance returns, because an operating project is commanding very low costs of capital in today’s market.

How big is your team?

We have 18 people and have been about that level for five years. We have a very heavily outsourced execution model where, in a mature market, we can complement our own expertise with skills in construction management, in operations, and in asset management.

We’re not planning any big step changes. We might see some solar come through, but it will always be a smaller part of our business than wind.

Interested in learning more about the North American wind market? Download our free ebook, 5 Lessons on the North American Wind Business, by clicking below.

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017. You can hear from Declan and a host of other top names in the US wind market at our Financing Wind New York conference on 30th May.

Here are the full details:
http://financingwind.com/

DeclanFlanagan-2

What are you doing in the US?

I came here in 2003 to set up Airtricity’s North American business, which we sold to E.On for $1.4bn in 2007. I then was CEO of E.On’s North American business from 2007 to 2009 and, at the end of 2009, set up Lincoln Clean Energy. For the first five years, Lincoln was a straight-up developer of large-scale wind and solar, but now we develop, own and operate.

Why did you change strategy?

At the end of 2015 we did a deal with I Squared Capital, which acquired the business. There is more value for us in staying in our projects for longer, and this deal means we can build, own and operate. We currently have 500MW under construction where we are 100% equity owner.

We also announced at the time a plan to deploy $250m in equity by 2018, and we’re on track to do that. We’re looking to build around 500MW per annum. Our next projects coming up in Texas and SPP are 300MW and 220MW, which will be in the market in the next six to 12 months.

Which are your current projects?

We’ve got the 250MW Willow Springs in Texas, which achieved its $330m financial close in April, and the Amazon Wind Farm Texas, which is 253MW. [Update: These two developments were commissioned in November and October respectively]

These are typical of what we’ve been doing for the last four years, totalling a little over 1.5GW. In the future, the core of our business will be wind farms of 250MW or more in the ‘wind corridor’, from Texas through SPP.

Are you concerned about the end of the wind production tax credit [PTC] from 2020?

No and yes. No, in so far as this business has always been about near-term execution, in the face of a 12- or 24-month PTC window, which is far from ideal. With the five-year window, the attention from the industry should be to build as many projects as we can in that time.

That said, there is a lot of focus at the national associations on the policy framework beyond the PTC, while bearing in mind that the US market is much more driven by state policy than federal policy.

So you are confident?

I’ve been in this industry a long time and a lot of people thought it might plateau in terms of the efficiency of the technology, but in the last four years we’ve still seen huge gains. That’s amazing. Continuing with that is the most important thing we can do as an industry. There’s a lot of potential to continue to drive efficiencies.

We are also seeing a lot more capital seeking development risk as a way to enhance returns, because an operating project is commanding very low costs of capital in today’s market.

How big is your team?

We have 18 people and have been about that level for five years. We have a very heavily outsourced execution model where, in a mature market, we can complement our own expertise with skills in construction management, in operations, and in asset management.

We’re not planning any big step changes. We might see some solar come through, but it will always be a smaller part of our business than wind.

Interested in learning more about the North American wind market? Download our free ebook, 5 Lessons on the North American Wind Business, by clicking below.

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017. You can hear from Declan and a host of other top names in the US wind market at our Financing Wind New York conference on 30th May.

Here are the full details:
http://financingwind.com/

DeclanFlanagan-2

What are you doing in the US?

I came here in 2003 to set up Airtricity’s North American business, which we sold to E.On for $1.4bn in 2007. I then was CEO of E.On’s North American business from 2007 to 2009 and, at the end of 2009, set up Lincoln Clean Energy. For the first five years, Lincoln was a straight-up developer of large-scale wind and solar, but now we develop, own and operate.

Why did you change strategy?

At the end of 2015 we did a deal with I Squared Capital, which acquired the business. There is more value for us in staying in our projects for longer, and this deal means we can build, own and operate. We currently have 500MW under construction where we are 100% equity owner.

We also announced at the time a plan to deploy $250m in equity by 2018, and we’re on track to do that. We’re looking to build around 500MW per annum. Our next projects coming up in Texas and SPP are 300MW and 220MW, which will be in the market in the next six to 12 months.

Which are your current projects?

We’ve got the 250MW Willow Springs in Texas, which achieved its $330m financial close in April, and the Amazon Wind Farm Texas, which is 253MW. [Update: These two developments were commissioned in November and October respectively]

These are typical of what we’ve been doing for the last four years, totalling a little over 1.5GW. In the future, the core of our business will be wind farms of 250MW or more in the ‘wind corridor’, from Texas through SPP.

Are you concerned about the end of the wind production tax credit [PTC] from 2020?

No and yes. No, in so far as this business has always been about near-term execution, in the face of a 12- or 24-month PTC window, which is far from ideal. With the five-year window, the attention from the industry should be to build as many projects as we can in that time.

That said, there is a lot of focus at the national associations on the policy framework beyond the PTC, while bearing in mind that the US market is much more driven by state policy than federal policy.

So you are confident?

I’ve been in this industry a long time and a lot of people thought it might plateau in terms of the efficiency of the technology, but in the last four years we’ve still seen huge gains. That’s amazing. Continuing with that is the most important thing we can do as an industry. There’s a lot of potential to continue to drive efficiencies.

We are also seeing a lot more capital seeking development risk as a way to enhance returns, because an operating project is commanding very low costs of capital in today’s market.

How big is your team?

We have 18 people and have been about that level for five years. We have a very heavily outsourced execution model where, in a mature market, we can complement our own expertise with skills in construction management, in operations, and in asset management.

We’re not planning any big step changes. We might see some solar come through, but it will always be a smaller part of our business than wind.

Interested in learning more about the North American wind market? Download our free ebook, 5 Lessons on the North American Wind Business, by clicking below.

We interviewed Declan Flanagan, chief executive at US developer Lincoln Clean Energy, in our Finance Quarterly report in July 2017. You can hear from Declan and a host of other top names in the US wind market at our Financing Wind New York conference on 30th May.

Here are the full details:
http://financingwind.com/

DeclanFlanagan-2

What are you doing in the US?

I came here in 2003 to set up Airtricity’s North American business, which we sold to E.On for $1.4bn in 2007. I then was CEO of E.On’s North American business from 2007 to 2009 and, at the end of 2009, set up Lincoln Clean Energy. For the first five years, Lincoln was a straight-up developer of large-scale wind and solar, but now we develop, own and operate.

Why did you change strategy?

At the end of 2015 we did a deal with I Squared Capital, which acquired the business. There is more value for us in staying in our projects for longer, and this deal means we can build, own and operate. We currently have 500MW under construction where we are 100% equity owner.

We also announced at the time a plan to deploy $250m in equity by 2018, and we’re on track to do that. We’re looking to build around 500MW per annum. Our next projects coming up in Texas and SPP are 300MW and 220MW, which will be in the market in the next six to 12 months.

Which are your current projects?

We’ve got the 250MW Willow Springs in Texas, which achieved its $330m financial close in April, and the Amazon Wind Farm Texas, which is 253MW. [Update: These two developments were commissioned in November and October respectively]

These are typical of what we’ve been doing for the last four years, totalling a little over 1.5GW. In the future, the core of our business will be wind farms of 250MW or more in the ‘wind corridor’, from Texas through SPP.

Are you concerned about the end of the wind production tax credit [PTC] from 2020?

No and yes. No, in so far as this business has always been about near-term execution, in the face of a 12- or 24-month PTC window, which is far from ideal. With the five-year window, the attention from the industry should be to build as many projects as we can in that time.

That said, there is a lot of focus at the national associations on the policy framework beyond the PTC, while bearing in mind that the US market is much more driven by state policy than federal policy.

So you are confident?

I’ve been in this industry a long time and a lot of people thought it might plateau in terms of the efficiency of the technology, but in the last four years we’ve still seen huge gains. That’s amazing. Continuing with that is the most important thing we can do as an industry. There’s a lot of potential to continue to drive efficiencies.

We are also seeing a lot more capital seeking development risk as a way to enhance returns, because an operating project is commanding very low costs of capital in today’s market.

How big is your team?

We have 18 people and have been about that level for five years. We have a very heavily outsourced execution model where, in a mature market, we can complement our own expertise with skills in construction management, in operations, and in asset management.

We’re not planning any big step changes. We might see some solar come through, but it will always be a smaller part of our business than wind.

Interested in learning more about the North American wind market? Download our free ebook, 5 Lessons on the North American Wind Business, by clicking below.

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Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.

Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.