Is Terra Firma seeking a divorce from Everpower? Ohio cheers

What could this mean for central Ohio, where citizens are fighting Everpower from taking over (10’s of) thousands of acres for an industrial wind site?  Terra Firma appears to be tired of empty promises from Everpower. And, it is very interesting that Everpower believes that a yieldco could become the new sugar daddy. Why? Yieldco’s are structured to deliver dividends in a low interest-rate economy. However, in order operate properly, they require stability- renewables that are about to generate electricity AND  have long-term contracts to sell their power.  In Ohio, Everpower’s future industrial wind sites are tied up in litigation AND, as mentioned below, it has ZERO buyers for the future energy….

When EverPower Wind Holdings put out feelers this summer to gauge who might want to buy a wind farm, “yieldcos” didn’t even show up. Six months ago, that would have been unthinkable. Yieldcos are a relatively new game in the energy world. They are publicly traded companies that hold wind and solar assets, distribute most of their revenue to shareholders, and are predicated on continuously growing their holdings to increase those distributions…

Wind growth isn’t much of a question mark, said Michael Speerschneider, EverPower’s chief of permitting and public policy. The Clean Power Plan, the federal answer to climate change that mandates carbon reductions from power generators, will incentivize more wind development. The law, which is being heavily challenged in the courts, is set to go into effect in 2022….

EverPower sale coming soon

Mr. Spencer said he expects EverPower to be sold within the next six months.

It’s been six years since a London-based private equity firm, Terra Firma Capital Partners, bought a controlling stake. That’s reaching the top range of how long private equity funds hold an investment before looking for a payout.

Since 2009, EverPower has grown from being a startup with 62 megawatts of wind capacity installed to operating hundreds of turbines with 752 megawatts of capacity across five states.

It also has a pipeline of at least 13 wind projects that would more than triple its installed capacity if all are built. Mr. Speerschneider said all are in the “mid-to-late stages” with some still awaiting certain permits but none having secured long-term customers for their power nor the financing to build.

“In our evolution, it’s probably as good a time as any to go to a new owner,” Mr. Spencer said. “There’s no shortage of capital or equity to build. The sector is as attractive as it’s ever been.”…

Source: Market for wind firm has changed

BigWind Wars across Ohio and around the world

Another flurry of activity at home and around the globe.   New turbine models were introduced by Senvion at 3 and 3.2 MW, to be built in the U.S. and designed to penetrate low wind communities.   Meanwhile, in Germany 71% of Danish wind imports are being rejected because the accompanying transmission lines are thought to degrade the landscape.   In the U.K., EverPower’s owner and Terra Firma Chairman, Guy Hands, was dumping money into the upcoming elections in order to defeat the Tories who adopted a “Manifesto”  that “states that the Conservatives will “halt the spread of onshore wind farms”, arguing that while onshore wind now makes a “meaningful contribution to our energy mix to our energy mix”, wind farms “often fail to win public support” and are “unable by themselves to provide the firm capacity that a stable energy system requires”.

 

Closer to home, the late Sam Walton’s brother-in-law, Frank Robson, has taken on the wind industry in Oklahoma after learning of plans for a development near his property.   “His efforts to push back against wind energy developments in Oklahoma led him to hire lobbyists. One firm hired, FKG Consulting, is the largest lobbying firm in the state. FKG Consulting supplied Robson with a small army of consultants including a pollster, and devised a strategy that has transformed Robson’s image from angry wealthy landowner to tax consumer advocate. Robson’s consultants transformed his message by halting the NIMBY talk, and devised a plan to go after tax incentives that support wind; a cause polling showed would be more compelling to the public. Robson has also hired a local marketing expert, who then started a group called “Wind Waste,” to pull the incentives that wind energy receives in the state out of context.”

On the Indiana/Ohio border, EDP Renewables is exploring a wind initiative in one, two or three counties: Wayne, Randolph and Henry. “It could be that we would build one in each county or one that straddles all three counties,” said EDP project manager Jeffrey Nemeth. “We just don’t know at this point. We are in the very, very early stages of development, and there’s a lot of studying to do.”  “Nemeth said initial plans in this area are to build a wind farm that includes 100 turbines and produces 200 megawatts, which is the same size as the current farm in Randolph County.”   The likely purchaser of the wind energy would be AEP.

In Ohio,  new PUCO Chairman Andre Porter  took office yesterday pledging “”I cannot stress that enough – how important it is that we do things in a way that everyone feels as if they’re being treated fairly. That means that no one gets special treatment. There is going to be a level playing field here at this commission,” he said.”    Ohio’s rural community hopes they will at last see fair treatment.  Porter could start by adhering to the laws and regulations governing the siting of wind turbines.

 

Speaking of those laws and regulations, the environmental left continued its Clean Energy Tour through Dayton trying to rally the troops to support reinstatement of the renewable mandates and repeal of the new property line setbacks.    In a  recent news story, Iberdrola’s Eric Thumma made some amazing statements.  Thumma said he would urge lawmakers to rescind or reconsider Ohio House Bill 483, which tripled property line setbacks for turbines on commercial wind farms. As a practical matter, the law rules out any new commercial wind farms that don’t already have permits, he said. No public hearings were held on that last-minute change before the bill passed last year. In the less than ten minutes of debate on it, Seitz railed against noise and other aspects of wind energy. “We’d like to see legislation that is obviously protective of the areas in which we’re developing, but also allows us to economically develop wind farms,” Thumma said. “What I always ask people to do is come have a conversation with me,” Thumma added. “We’ll stand under an operating wind turbine, and we can talk at the same level that we’re talking right now.”   WOW!  Thumma is trying to conflate inaudible emissions with audible emissions while ignoring all laws of physics surrounding noise propagation.  Standing under a turbine to have a conversation is not something anyone would say in 2015 unless they think the audience is incredibly stupid.

 

We enjoyed Senator’s Seitz reply to subject of the mandates that now must be considered in the context of the EPA’s proposed Clean Power Plan.  ““The issue is not whether you’re for or against having the wind blow or the sun shine or the possibilities of using that as a power source,” Seitz said. “The issue rather is should utilities be mandated to buy that fuel, and should ratepayers be mandated to pay for it? Or should ratepayers have some choice in the matter? That’s really the issue. It’s been the issue all along.” “That’s the issue to me and to many others on this committee,” Seitz said. “And that issue has been compounded by the looming omnipresence of this ridiculous U.S. EPA Clean Power Plan.” The Clean Power Plan “threatens to impose new mandates on top of whatever state mandates there are,” Seitz said. “Why should we continue marching up State Mandate Mountain when there are new federal mandates on the horizon?”  

  

Last but not least, the bat issues are still mired in debate while UNU and the Indiana University Conservation Law Center decide whether or not to file an appeal to the EverPower bat mitigation plan. There is a great deal going on in this world and we appreciate everyone who has stuck with us and continued to educate themselves and their community. Thank you….   

While an Ohio energy study committee is tasked by law to look broadly at both the costs and benefits of the state’s clean energy standards, advocates say most of the group’s focus so far has been on factors against them.

“The committee has stated that they are coming at this with an open mind, and I continue to give them the benefit of the doubt,” said Rob Kelter of the Environmental Law & Policy Center.

However, Kelter added, last month’s meeting of Ohio’s Energy Mandates Study Committee was “disconcerting.”

Lawmakers at that meeting focused primarily on perceived weaknesses of wind and solar energy, without considering the benefits of either renewable energy or energy efficiency….

Most of the time lawmakers spent asking questions focused on those discounts and ignored the primary value of renewable energy, say advocates.

“Wind is not necessarily a capacity resource,” said Dan Sawmiller of the Sierra Club’s Beyond Coal program. “It’s an energy resource.”

The capacity auction aims “to make sure that when there’s a peak period of demand, there is either enough generation or enough demand response or other energy efficiency resources to be able to make sure that the grid is in balance,” said Eric Thumma at Iberdrola Renewables, whose projects include the 304 MW Blue Creek Wind Farm in northwest Ohio.

“That’s a different product from energy, which is just the megawatt hours that are delivered to the grid from resources,” Thumma continued. “That’s really the product that wind and solar provide. They’re energy resources.”

“Capacity factors by themselves are not that critical,” Sawmiller said. “Consumers are more concerned with the total cost of producing the reliable electricity that they demand, not the capacity factor of a particular resource.”…

“The issue is not whether you’re for or against having the wind blow or the sun shine or the possibilities of using that as a power source,” Seitz said. “The issue rather is should utilities be mandated to buy that fuel, and should ratepayers be mandated to pay for it? Or should ratepayers have some choice in the matter? That’s really the issue. It’s been the issue all along.”

“That’s the issue to me and to many others on this committee,” Seitz said. “And that issue has been compounded by the looming omnipresence of this ridiculous U.S. EPA Clean Power Plan.”

The Clean Power Plan “threatens to impose new mandates on top of whatever state mandates there are,” Seitz said. “Why should we continue marching up State Mandate Mountain when there are new federal mandates on the horizon?”

Energy efficiency standards in Ohio and elsewhere “are totally cost-effective and save ratepayers hundreds of millions of dollars,” stressed Kushler.

“Even if EPA disappeared tomorrow, it would still be in the best interests of Ohio to do energy efficiency programs,” Kushler continued. “Energy efficiency is still cheaper than supplying and operating those generating plants and paying for their replacements” when they eventually get too old.

Thumma said he would urge lawmakers to rescind or reconsider Ohio House Bill 483, which tripled property line setbacks for turbines on commercial wind farms. As a practical matter, the law rules out any new commercial wind farms that don’t already have permits, he said.

No public hearings were held on that last-minute change before the bill passed last year. In the less than ten minutes of debate on it, Seitz railed against noise and other aspects of wind energy.

“We’d like to see legislation that is obviously protective of the areas in which we’re developing, but also allows us to economically develop wind farms,” Thumma said.

“What I always ask people to do is come have a conversation with me,” Thumma added. “We’ll stand under an operating wind turbine, and we can talk at the same level that we’re talking right now.”…

Advocates hope Ohio energy committee will broaden focus | Midwest Energy News.

additional references from above, please copy/paste:

http://www.dispatch.com/content/stories/business/2015/04/15/porter-sworn-in-as-puco-chairman.html

http://www.ohioenergyfuturetour.com

http://www.businessgreen.com/bg/news/2403945/tory-manifesto-vows-to-halt-the-spread-of-onshore-windfarms/page/2

http://www.midwestenergynews.com/2015/04/08/bat-listings-impact-on-wind-industry-yet-to-be-determined/

Does Everpower’s owner view it as a “noble way to lose money”?

Remember, we recently posted a blog about Terra Firma, the owner of Everpower- the company hoping to develop a BigWind industrial facility in Ohio. How could this affect the future of this facility for Ohio? How could this affect the tax promises to the counties? the leaseholders? the farmland?….

Private equity houses are retreating from the much-hyped renewable energy sector in the wake of a swath of lossmaking investments.

About 87 per cent of renewables-focused private equity funds have generated returns below that of the median private equity fund to date, with vehicles managed by HgCapital, Impax, InfraRed, BlackRock and Foresight all currently under water, according to figures from Preqin, the data provider.

Sector-wide returns have been so poor that few of the large energy-focused US private equity houses that have launched dedicated renewables funds to date are expected to offer follow-up funds….

“Just 22 per cent of funds have an IRR [internal rate of return] over 3 per cent. To me 3 per cent is losing money because you have a cost of capital. Just looking at the numbers, it does not really stack up in the private equity world,” he said.

“From my experience, you would look at many projects and only a few of them would be economically viable.”…

Joseph Dear, chief investment officer of Calpers, the world’s sixth-largest pension fund, last year described clean-tech investment as a “noble way to lose money”, with Calpers having suffered annualised losses of 9.7 per cent in the sector.

“We are all familiar with the J-curve in private equity. Well, for Calpers, clean-tech investing has got an L-curve for ‘lose’,” added Mr Dear. “If it takes 12 years to get the money out, the internal rate of return is not going to be very good, even if the investment is reasonably successful.”

Plans by Guy Hands’ Terra Firma house to launch a $2bn renewables fund were thrown into doubt last week when Damian Darragh, the star dealmaker in charge of raising the fund, was sacked.

A senior figure at one private equity house with a renewable energy fund, who declined to be named, said venture capital-style clean-tech investments, such as making electric vehicles or solar panels, had “done horribly”, but argued that biomass, solar or wind farm operations themselves had provided a “decent, respectable return”, with institutional investors such as pension funds keen to buy sites when they are up and running.

Jay Yoder, head of real assets investment at Altius, described renewable energy investing as a “trendy fad” that was overly reliant on government promises of tax credits and subsidies, which have been broken in countries such as Spain.

“We are constantly warning investors about renewable energy. One is investing more in political decisions than in tangible assets,” he said.

“Unfortunately, when the inevitable, and considerably higher, bill comes due, constituents start complaining and politicians start breaking their promises and reneging on their contracts.”

February 16, 2014 3:14 am Private equity retreats from renewables ‘fad’ By Steve Johnson

via http://www.ft.com/intl/cms/s/0/ef1b2248-94bb-11e3-9146-00144feab7de.html#axzz2tx1uLGi2