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US energy leader sells its RES business

Wednesday, July 12, 2017


#US #Europe #NRG #Divestment #Consolidation

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One of the US’ leading energy suppliers, NRG Energy, plans to sell up to $4 billion (€3,5 billion) worth of assets from its diverse portfolio. The divestment includes 6 GW of conventional power plants and more than 3 GW of RES plants.

The company has a total of over 45 GW capacity with both conventional and RES assets. It has been working on restructuring its business since the beginning of the year and revealed plans to sell its entire stake in NRG Yield. The company also plans to divest between 50 and 100% in its other RES assets. According to NRG’s CEO, Mauricio Gutierrez, the RES divestment will include both operational power plants as well as projects under development.

Under its previous CEO, David Crane, NRG Energy expanded into residential solar and acquired a large portfolio of RES plants, including 1,5 GW of SunEdison’s solar projects. The new Board Members, however, decided to refocus the company towards commercial large-scale customers and to invest in low risk projects with 12-15% returns.

The shift towards a separation of RES from conventional business follows a similar trend across the Atlantic. Nearly one year ago, E.ON and RWE split their businesses into conventional and RES branches, creating Innogy and Uniper respectively. On multiple occasions in 2017, Innogy was rumoured to be in talks for a merger with Engie (see Industry News of 19 May 2017: ‘Possible RWE-Engie share swap could create Franco-German power giant’) but  the rumours remain unconfirmed by Engie’s CEO, Isabelle Kocher. With the further integration and adoption of RES in the US and European grids, future restructuring and consolidation of businesses, as well as consolidation of RES players can be expected.

Links:

GreenTech Media

New York Times

Financial Times