Tradewind carve-up points to the potential of hybrids

This week, Italian utility Enel announced that its US subsidiary Enel Green Power North America has agreed to buy independent developer Tradewind Energy.

Richard Heap
May 17, 2019
Tradewind carve-up points to the potential of hybrids

This week, Italian utility Enel announced that its US subsidiary Enel Green Power North America has agreed to buy independent developer Tradewind Energy. The Kansas company has been a long-time development partner of Enel in the US, so the pair know each other well. If any utility was to buy Tradewind, it was Enel.

The interesting element for us, though, is what and whom Enel plans to let go.

On Wednesday, Enel Green Power North America announced that it has agreed to buy all of Tradewind’s 13GW wind, solar and storage development platform across the US. On the same day, it revealed that it had agreed to sell Tradewind subsidiary Savion, which has a 6GW portfolio of solar and storage projects in its development pipeline, to Macquarie’s Green Investment Group. That will take some unpicking.

And on top of that, GIG announced that former Tradewind principals Rob Freeman – number nine on our North American Power List in 2018 – and Geoff Coventry are set to run Savion for GIG. Their partnership with Enel is, it seems, coming to an end.

So how do we read this for each firm and what does it tell us about the market?

First, let’s look at Tradewind. The trend for European utilities to buy US onshore wind development platforms is nothing new. Engie, Innogy and Orsted are among those who have bought well-known US wind developers over the last year or so – Infinity, EverPower and Lincoln Clean Energy respectively – and that’s just off the top of my head. It is a good time for developers to sell out while there are interested buyers.

Beyond that, we can only speculate. Tradewind hasn’t yet said anything publicly about the deals, which are due to close by the end of June as long as they secure approval from regulators. To us, though, it is interesting that Freeman and Coventry are stepping away from Tradewind to focus on building a solar and storage platform. Perhaps this tells us where they see the most long-term potential in renewables.

Second, for GIG, this transaction further underlines its global ambitions following its acquisition by Macquarie from the UK government in 2017. The company launched in North America in June 2018 by partnering with Candela Renewables on over 1GW of solar and, separately, reaching financial close on a 200MW wind farm in Texas.

But we think it says more than that. The fact that GIG wants to grow in the US is little surprise, as it is one of the world’s most attractive renewables markets, but throwing its weight behind Savion shows that it too is looking to capitalise on growth of solar.

Remember, GIG also bought a portfolio of solar development assets in Asia-Pacific from Conergy last year. Its activities in European offshore wind have slowed, and so this might indicate that it sees utility-scale solar as one of its next big things.

And third, for Enel, the Tradewind buyout gives it a 7GW portfolio of wind projects as well as strong development experience. Georgios Papadimitrou, head of Enel Green Power North America, said the deal would bring in the development experience that would help it “carry out our North American growth strategy across all technologies”.

That’s intriguing. Tradewind has built one of the biggest wind development platforms and portfolios in the US, but the excitement of growing in wind is almost a footnote in Enel’s statement on this deal. It says its goal is to grow in all renewables, and seems to point to the company’s ambition to pursue hybrid wind, solar and storage projects. Letting Savion go appears like a short-term move to raise capital to invest in building out its wind pipeline, but doesn’t indicate a lack of willingness in solar or storage.

Therefore, we can’t help but wonder whether this could open up further deals or a broader partnership between Enel and GIG in the coming years. GIG is always on the lookout for exciting projects to invest in, which could help Enel. Meanwhile, GIG will look to exit Savion at some point, which could be an opportunity for Enel.

At first look these transactions appear to sever links between Tradewind’s founders and Enel. The reality could be more complex.

This week, Italian utility Enel announced that its US subsidiary Enel Green Power North America has agreed to buy independent developer Tradewind Energy. The Kansas company has been a long-time development partner of Enel in the US, so the pair know each other well. If any utility was to buy Tradewind, it was Enel.

The interesting element for us, though, is what and whom Enel plans to let go.

On Wednesday, Enel Green Power North America announced that it has agreed to buy all of Tradewind’s 13GW wind, solar and storage development platform across the US. On the same day, it revealed that it had agreed to sell Tradewind subsidiary Savion, which has a 6GW portfolio of solar and storage projects in its development pipeline, to Macquarie’s Green Investment Group. That will take some unpicking.

And on top of that, GIG announced that former Tradewind principals Rob Freeman – number nine on our North American Power List in 2018 – and Geoff Coventry are set to run Savion for GIG. Their partnership with Enel is, it seems, coming to an end.

So how do we read this for each firm and what does it tell us about the market?

First, let’s look at Tradewind. The trend for European utilities to buy US onshore wind development platforms is nothing new. Engie, Innogy and Orsted are among those who have bought well-known US wind developers over the last year or so – Infinity, EverPower and Lincoln Clean Energy respectively – and that’s just off the top of my head. It is a good time for developers to sell out while there are interested buyers.

Beyond that, we can only speculate. Tradewind hasn’t yet said anything publicly about the deals, which are due to close by the end of June as long as they secure approval from regulators. To us, though, it is interesting that Freeman and Coventry are stepping away from Tradewind to focus on building a solar and storage platform. Perhaps this tells us where they see the most long-term potential in renewables.

Second, for GIG, this transaction further underlines its global ambitions following its acquisition by Macquarie from the UK government in 2017. The company launched in North America in June 2018 by partnering with Candela Renewables on over 1GW of solar and, separately, reaching financial close on a 200MW wind farm in Texas.

But we think it says more than that. The fact that GIG wants to grow in the US is little surprise, as it is one of the world’s most attractive renewables markets, but throwing its weight behind Savion shows that it too is looking to capitalise on growth of solar.

Remember, GIG also bought a portfolio of solar development assets in Asia-Pacific from Conergy last year. Its activities in European offshore wind have slowed, and so this might indicate that it sees utility-scale solar as one of its next big things.

And third, for Enel, the Tradewind buyout gives it a 7GW portfolio of wind projects as well as strong development experience. Georgios Papadimitrou, head of Enel Green Power North America, said the deal would bring in the development experience that would help it “carry out our North American growth strategy across all technologies”.

That’s intriguing. Tradewind has built one of the biggest wind development platforms and portfolios in the US, but the excitement of growing in wind is almost a footnote in Enel’s statement on this deal. It says its goal is to grow in all renewables, and seems to point to the company’s ambition to pursue hybrid wind, solar and storage projects. Letting Savion go appears like a short-term move to raise capital to invest in building out its wind pipeline, but doesn’t indicate a lack of willingness in solar or storage.

Therefore, we can’t help but wonder whether this could open up further deals or a broader partnership between Enel and GIG in the coming years. GIG is always on the lookout for exciting projects to invest in, which could help Enel. Meanwhile, GIG will look to exit Savion at some point, which could be an opportunity for Enel.

At first look these transactions appear to sever links between Tradewind’s founders and Enel. The reality could be more complex.

This week, Italian utility Enel announced that its US subsidiary Enel Green Power North America has agreed to buy independent developer Tradewind Energy. The Kansas company has been a long-time development partner of Enel in the US, so the pair know each other well. If any utility was to buy Tradewind, it was Enel.

The interesting element for us, though, is what and whom Enel plans to let go.

On Wednesday, Enel Green Power North America announced that it has agreed to buy all of Tradewind’s 13GW wind, solar and storage development platform across the US. On the same day, it revealed that it had agreed to sell Tradewind subsidiary Savion, which has a 6GW portfolio of solar and storage projects in its development pipeline, to Macquarie’s Green Investment Group. That will take some unpicking.

And on top of that, GIG announced that former Tradewind principals Rob Freeman – number nine on our North American Power List in 2018 – and Geoff Coventry are set to run Savion for GIG. Their partnership with Enel is, it seems, coming to an end.

So how do we read this for each firm and what does it tell us about the market?

First, let’s look at Tradewind. The trend for European utilities to buy US onshore wind development platforms is nothing new. Engie, Innogy and Orsted are among those who have bought well-known US wind developers over the last year or so – Infinity, EverPower and Lincoln Clean Energy respectively – and that’s just off the top of my head. It is a good time for developers to sell out while there are interested buyers.

Beyond that, we can only speculate. Tradewind hasn’t yet said anything publicly about the deals, which are due to close by the end of June as long as they secure approval from regulators. To us, though, it is interesting that Freeman and Coventry are stepping away from Tradewind to focus on building a solar and storage platform. Perhaps this tells us where they see the most long-term potential in renewables.

Second, for GIG, this transaction further underlines its global ambitions following its acquisition by Macquarie from the UK government in 2017. The company launched in North America in June 2018 by partnering with Candela Renewables on over 1GW of solar and, separately, reaching financial close on a 200MW wind farm in Texas.

But we think it says more than that. The fact that GIG wants to grow in the US is little surprise, as it is one of the world’s most attractive renewables markets, but throwing its weight behind Savion shows that it too is looking to capitalise on growth of solar.

Remember, GIG also bought a portfolio of solar development assets in Asia-Pacific from Conergy last year. Its activities in European offshore wind have slowed, and so this might indicate that it sees utility-scale solar as one of its next big things.

And third, for Enel, the Tradewind buyout gives it a 7GW portfolio of wind projects as well as strong development experience. Georgios Papadimitrou, head of Enel Green Power North America, said the deal would bring in the development experience that would help it “carry out our North American growth strategy across all technologies”.

That’s intriguing. Tradewind has built one of the biggest wind development platforms and portfolios in the US, but the excitement of growing in wind is almost a footnote in Enel’s statement on this deal. It says its goal is to grow in all renewables, and seems to point to the company’s ambition to pursue hybrid wind, solar and storage projects. Letting Savion go appears like a short-term move to raise capital to invest in building out its wind pipeline, but doesn’t indicate a lack of willingness in solar or storage.

Therefore, we can’t help but wonder whether this could open up further deals or a broader partnership between Enel and GIG in the coming years. GIG is always on the lookout for exciting projects to invest in, which could help Enel. Meanwhile, GIG will look to exit Savion at some point, which could be an opportunity for Enel.

At first look these transactions appear to sever links between Tradewind’s founders and Enel. The reality could be more complex.

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