Wind can win from Enbridge's $28bn pipeline deal

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Richard Heap
September 9, 2016
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Wind can win from Enbridge's $28bn pipeline deal

It seems appropriate that in the week we published our Landmark Deals report we have seen another big takeover announcement: Canadian pipeline and renewables giant Enbridge is set to buy US rival Spectra in a $28bn all-share transaction.

With this deal, Enbridge is looking to become the largest energy infrastructure firm in North America, and the combined company’s enterprise value of $130bn is set to put it in the same league as BP and Total. It would also help the business shift its focus away from Canada, where it is facing significant political opposition to its oil pipeline projects. Prime Minister Justin Trudeau opposes its Northern Gateway oil pipeline project, for example.

If the deal completes as planned, which is due to happen in the first quarter of 2017, then Enbridge shareholders will own around 57% of the combined company and the other 43% would be held by Spectra shareholders. Its assets include oil and gas pipelines; terminal and midstream operations; and regulated utility portfolio.

Oh, and renewables projects too. Enbridge has been investing in renewables for the last 14 years. It invested in its first wind farm, the 11MW SunBridge scheme in Canada, in 2002; and has since spent over $5bn in projects, mainly wind farms, totalling 2.7GW.

The firm owns stakes of 1.7GW in these projects, and 90% of its renewable energy investments are in wind. Its most recent deals include buying the 103MW New Creek project in the US and a 24.9% stake in 400MW UK offshore scheme Rampion.

Enbridge last year revealed plans to grow its renewables portfolio to between 3GW and 4.5GW by the end of this decade. How does the $28bn Spectra deal affect this?

In the very short term it has little effect. Spectra does not own
any renewable energy assets, and so this acquisition does not immediately bolster the 1.7GW that Enbridge holds. We can rule out the idea that this will help its renewables arm on day one.

And we also expect it to be business as usual for Enbridge’s investment strategy. In the last decade, the firm has been growing in renewables while also looking after its core business in oil and gas. Buying Spectra is a big deal and a great opportunity to bolster its pipelines business, while also giving it protection from political problems in Canada. But we do not expect this to fundamentally shift its views on renewables.

In fact, we see this as good for its investment plans in wind.

The deal strengthens Enbridge’s balance sheet and that should make it easier for it to invest in large wind projects. The extension of the US production tax credit means that there will be onshore opportunities in North America over the next five years.

It also gives Enbridge the financial muscle to increase its exposure to offshore wind in Europe, as well as the fledgling North American market. Al Monaco, president and chief executive of the company, has committed to growing offshore, where the huge turbines and huge projects also means huge costs. Financial strength is key.

In addition to Rampion, Enbridge paid $282m in May for Dong Energy’s 50% stake in French offshore firm Eolien Maritime France SAS, which is developing three projects – Calvados, Hautes Falaises and Parc du Banc de Guerande – totalling 1.4GW. It is developing the trio with EDF and they could reach financial close this year. We have seen Canada’s Northland Power go big on offshore and Enbridge could follow suit.

And finally, Enbridge sees buying Spectra as a way to better manage the risks on its home market, and that should be good for the company as a whole. It is too early to judge if this is a 2017
‘landmark deal’ – but, for now, it looks like wind has little to fear.

%MCEPASTEBIN%

It seems appropriate that in the week we published our Landmark Deals report we have seen another big takeover announcement: Canadian pipeline and renewables giant Enbridge is set to buy US rival Spectra in a $28bn all-share transaction.

With this deal, Enbridge is looking to become the largest energy infrastructure firm in North America, and the combined company’s enterprise value of $130bn is set to put it in the same league as BP and Total. It would also help the business shift its focus away from Canada, where it is facing significant political opposition to its oil pipeline projects. Prime Minister Justin Trudeau opposes its Northern Gateway oil pipeline project, for example.

If the deal completes as planned, which is due to happen in the first quarter of 2017, then Enbridge shareholders will own around 57% of the combined company and the other 43% would be held by Spectra shareholders. Its assets include oil and gas pipelines; terminal and midstream operations; and regulated utility portfolio.

Oh, and renewables projects too. Enbridge has been investing in renewables for the last 14 years. It invested in its first wind farm, the 11MW SunBridge scheme in Canada, in 2002; and has since spent over $5bn in projects, mainly wind farms, totalling 2.7GW.

The firm owns stakes of 1.7GW in these projects, and 90% of its renewable energy investments are in wind. Its most recent deals include buying the 103MW New Creek project in the US and a 24.9% stake in 400MW UK offshore scheme Rampion.

Enbridge last year revealed plans to grow its renewables portfolio to between 3GW and 4.5GW by the end of this decade. How does the $28bn Spectra deal affect this?

In the very short term it has little effect. Spectra does not own
any renewable energy assets, and so this acquisition does not immediately bolster the 1.7GW that Enbridge holds. We can rule out the idea that this will help its renewables arm on day one.

And we also expect it to be business as usual for Enbridge’s investment strategy. In the last decade, the firm has been growing in renewables while also looking after its core business in oil and gas. Buying Spectra is a big deal and a great opportunity to bolster its pipelines business, while also giving it protection from political problems in Canada. But we do not expect this to fundamentally shift its views on renewables.

In fact, we see this as good for its investment plans in wind.

The deal strengthens Enbridge’s balance sheet and that should make it easier for it to invest in large wind projects. The extension of the US production tax credit means that there will be onshore opportunities in North America over the next five years.

It also gives Enbridge the financial muscle to increase its exposure to offshore wind in Europe, as well as the fledgling North American market. Al Monaco, president and chief executive of the company, has committed to growing offshore, where the huge turbines and huge projects also means huge costs. Financial strength is key.

In addition to Rampion, Enbridge paid $282m in May for Dong Energy’s 50% stake in French offshore firm Eolien Maritime France SAS, which is developing three projects – Calvados, Hautes Falaises and Parc du Banc de Guerande – totalling 1.4GW. It is developing the trio with EDF and they could reach financial close this year. We have seen Canada’s Northland Power go big on offshore and Enbridge could follow suit.

And finally, Enbridge sees buying Spectra as a way to better manage the risks on its home market, and that should be good for the company as a whole. It is too early to judge if this is a 2017
‘landmark deal’ – but, for now, it looks like wind has little to fear.

%MCEPASTEBIN%

It seems appropriate that in the week we published our Landmark Deals report we have seen another big takeover announcement: Canadian pipeline and renewables giant Enbridge is set to buy US rival Spectra in a $28bn all-share transaction.

With this deal, Enbridge is looking to become the largest energy infrastructure firm in North America, and the combined company’s enterprise value of $130bn is set to put it in the same league as BP and Total. It would also help the business shift its focus away from Canada, where it is facing significant political opposition to its oil pipeline projects. Prime Minister Justin Trudeau opposes its Northern Gateway oil pipeline project, for example.

If the deal completes as planned, which is due to happen in the first quarter of 2017, then Enbridge shareholders will own around 57% of the combined company and the other 43% would be held by Spectra shareholders. Its assets include oil and gas pipelines; terminal and midstream operations; and regulated utility portfolio.

Oh, and renewables projects too. Enbridge has been investing in renewables for the last 14 years. It invested in its first wind farm, the 11MW SunBridge scheme in Canada, in 2002; and has since spent over $5bn in projects, mainly wind farms, totalling 2.7GW.

The firm owns stakes of 1.7GW in these projects, and 90% of its renewable energy investments are in wind. Its most recent deals include buying the 103MW New Creek project in the US and a 24.9% stake in 400MW UK offshore scheme Rampion.

Enbridge last year revealed plans to grow its renewables portfolio to between 3GW and 4.5GW by the end of this decade. How does the $28bn Spectra deal affect this?

In the very short term it has little effect. Spectra does not own
any renewable energy assets, and so this acquisition does not immediately bolster the 1.7GW that Enbridge holds. We can rule out the idea that this will help its renewables arm on day one.

And we also expect it to be business as usual for Enbridge’s investment strategy. In the last decade, the firm has been growing in renewables while also looking after its core business in oil and gas. Buying Spectra is a big deal and a great opportunity to bolster its pipelines business, while also giving it protection from political problems in Canada. But we do not expect this to fundamentally shift its views on renewables.

In fact, we see this as good for its investment plans in wind.

The deal strengthens Enbridge’s balance sheet and that should make it easier for it to invest in large wind projects. The extension of the US production tax credit means that there will be onshore opportunities in North America over the next five years.

It also gives Enbridge the financial muscle to increase its exposure to offshore wind in Europe, as well as the fledgling North American market. Al Monaco, president and chief executive of the company, has committed to growing offshore, where the huge turbines and huge projects also means huge costs. Financial strength is key.

In addition to Rampion, Enbridge paid $282m in May for Dong Energy’s 50% stake in French offshore firm Eolien Maritime France SAS, which is developing three projects – Calvados, Hautes Falaises and Parc du Banc de Guerande – totalling 1.4GW. It is developing the trio with EDF and they could reach financial close this year. We have seen Canada’s Northland Power go big on offshore and Enbridge could follow suit.

And finally, Enbridge sees buying Spectra as a way to better manage the risks on its home market, and that should be good for the company as a whole. It is too early to judge if this is a 2017
‘landmark deal’ – but, for now, it looks like wind has little to fear.

%MCEPASTEBIN%

It seems appropriate that in the week we published our Landmark Deals report we have seen another big takeover announcement: Canadian pipeline and renewables giant Enbridge is set to buy US rival Spectra in a $28bn all-share transaction.

With this deal, Enbridge is looking to become the largest energy infrastructure firm in North America, and the combined company’s enterprise value of $130bn is set to put it in the same league as BP and Total. It would also help the business shift its focus away from Canada, where it is facing significant political opposition to its oil pipeline projects. Prime Minister Justin Trudeau opposes its Northern Gateway oil pipeline project, for example.

If the deal completes as planned, which is due to happen in the first quarter of 2017, then Enbridge shareholders will own around 57% of the combined company and the other 43% would be held by Spectra shareholders. Its assets include oil and gas pipelines; terminal and midstream operations; and regulated utility portfolio.

Oh, and renewables projects too. Enbridge has been investing in renewables for the last 14 years. It invested in its first wind farm, the 11MW SunBridge scheme in Canada, in 2002; and has since spent over $5bn in projects, mainly wind farms, totalling 2.7GW.

The firm owns stakes of 1.7GW in these projects, and 90% of its renewable energy investments are in wind. Its most recent deals include buying the 103MW New Creek project in the US and a 24.9% stake in 400MW UK offshore scheme Rampion.

Enbridge last year revealed plans to grow its renewables portfolio to between 3GW and 4.5GW by the end of this decade. How does the $28bn Spectra deal affect this?

In the very short term it has little effect. Spectra does not own
any renewable energy assets, and so this acquisition does not immediately bolster the 1.7GW that Enbridge holds. We can rule out the idea that this will help its renewables arm on day one.

And we also expect it to be business as usual for Enbridge’s investment strategy. In the last decade, the firm has been growing in renewables while also looking after its core business in oil and gas. Buying Spectra is a big deal and a great opportunity to bolster its pipelines business, while also giving it protection from political problems in Canada. But we do not expect this to fundamentally shift its views on renewables.

In fact, we see this as good for its investment plans in wind.

The deal strengthens Enbridge’s balance sheet and that should make it easier for it to invest in large wind projects. The extension of the US production tax credit means that there will be onshore opportunities in North America over the next five years.

It also gives Enbridge the financial muscle to increase its exposure to offshore wind in Europe, as well as the fledgling North American market. Al Monaco, president and chief executive of the company, has committed to growing offshore, where the huge turbines and huge projects also means huge costs. Financial strength is key.

In addition to Rampion, Enbridge paid $282m in May for Dong Energy’s 50% stake in French offshore firm Eolien Maritime France SAS, which is developing three projects – Calvados, Hautes Falaises and Parc du Banc de Guerande – totalling 1.4GW. It is developing the trio with EDF and they could reach financial close this year. We have seen Canada’s Northland Power go big on offshore and Enbridge could follow suit.

And finally, Enbridge sees buying Spectra as a way to better manage the risks on its home market, and that should be good for the company as a whole. It is too early to judge if this is a 2017
‘landmark deal’ – but, for now, it looks like wind has little to fear.

%MCEPASTEBIN%

It seems appropriate that in the week we published our Landmark Deals report we have seen another big takeover announcement: Canadian pipeline and renewables giant Enbridge is set to buy US rival Spectra in a $28bn all-share transaction.

With this deal, Enbridge is looking to become the largest energy infrastructure firm in North America, and the combined company’s enterprise value of $130bn is set to put it in the same league as BP and Total. It would also help the business shift its focus away from Canada, where it is facing significant political opposition to its oil pipeline projects. Prime Minister Justin Trudeau opposes its Northern Gateway oil pipeline project, for example.

If the deal completes as planned, which is due to happen in the first quarter of 2017, then Enbridge shareholders will own around 57% of the combined company and the other 43% would be held by Spectra shareholders. Its assets include oil and gas pipelines; terminal and midstream operations; and regulated utility portfolio.

Oh, and renewables projects too. Enbridge has been investing in renewables for the last 14 years. It invested in its first wind farm, the 11MW SunBridge scheme in Canada, in 2002; and has since spent over $5bn in projects, mainly wind farms, totalling 2.7GW.

The firm owns stakes of 1.7GW in these projects, and 90% of its renewable energy investments are in wind. Its most recent deals include buying the 103MW New Creek project in the US and a 24.9% stake in 400MW UK offshore scheme Rampion.

Enbridge last year revealed plans to grow its renewables portfolio to between 3GW and 4.5GW by the end of this decade. How does the $28bn Spectra deal affect this?

In the very short term it has little effect. Spectra does not own
any renewable energy assets, and so this acquisition does not immediately bolster the 1.7GW that Enbridge holds. We can rule out the idea that this will help its renewables arm on day one.

And we also expect it to be business as usual for Enbridge’s investment strategy. In the last decade, the firm has been growing in renewables while also looking after its core business in oil and gas. Buying Spectra is a big deal and a great opportunity to bolster its pipelines business, while also giving it protection from political problems in Canada. But we do not expect this to fundamentally shift its views on renewables.

In fact, we see this as good for its investment plans in wind.

The deal strengthens Enbridge’s balance sheet and that should make it easier for it to invest in large wind projects. The extension of the US production tax credit means that there will be onshore opportunities in North America over the next five years.

It also gives Enbridge the financial muscle to increase its exposure to offshore wind in Europe, as well as the fledgling North American market. Al Monaco, president and chief executive of the company, has committed to growing offshore, where the huge turbines and huge projects also means huge costs. Financial strength is key.

In addition to Rampion, Enbridge paid $282m in May for Dong Energy’s 50% stake in French offshore firm Eolien Maritime France SAS, which is developing three projects – Calvados, Hautes Falaises and Parc du Banc de Guerande – totalling 1.4GW. It is developing the trio with EDF and they could reach financial close this year. We have seen Canada’s Northland Power go big on offshore and Enbridge could follow suit.

And finally, Enbridge sees buying Spectra as a way to better manage the risks on its home market, and that should be good for the company as a whole. It is too early to judge if this is a 2017
‘landmark deal’ – but, for now, it looks like wind has little to fear.

%MCEPASTEBIN%

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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.