Power Production

Tom Konrad CFA Disclosure: I am long TSX:PRI / PENGF. The poster child of energy efficiency has long been changing a light bulb.  First, it was swapping out an incandescent for a compact fluorescent, now the swap is to an LED.  Changing a light bulb is a small step that anyone can take, and it’s so cost effective that it can pay for itself in months if the bulb is used frequently. This is a good example of household energy efficiency measures: a small action requiring a limited investment that anyone can take that pays back quickly....

Tom Konrad CFA Disclosure: Long BEP, MCQPF. PENGF, AQUNF Last week, I was surprised to discover that Brookfield Renewable Energy Partners (NYSE:BEP, TSX:BEP-UN) is not entirely renewable. I’ve owned shares of Brookfield for many years, but as a relatively safe income stock, I’ve parked it in the back of my portfolio to gather dust and dividends. I apply my limited time for in-depth analysis to riskier stocks where a quarter’s earnings are likely to make a much bigger difference in the stock price. I may have noticed the “Other” category in addition to BEP’s wind and hydroelectric generation...

Wind farm owner and developer stocks are publicly traded companies that site, permit, develop, construct, own, or operate wind farms for producing electricity. This list was last updated on 3/22/2022 Acciona, S.A. (ANA.MC, ACXIF) Adani Green Energy (ADANIGREEN.NSE) Algonquin Power and Utilities (AQN, AQN.TO) Atlantica Yield PLC (AY) Atlantic Power Corporation (AT) Avangrid, Inc. (AGR) Boralex (BLX.TO, BRLXF) Brookfield Renewable Energy Partners (BEP) China Longyuan Power Group Corporation Limited (0916.HK, CLPXF) China Ruifeng Renewable Energy Holdings Limited (0527.HK) Orsted (ORSTED.CO, formerly DENERG.CO) E.ON AG (EONGY) Enel SpA (ENEL.MI, ESOCF) Greencoat UK Wind (UKW.L) Infigen Energy Limited (IFN.AX, IFGNF) Innergex Renewable Energy Inc. (INE.TO, INGXF) Neoen S.A (NEOEN.PA) NextEra Energy Partners, LP (NEP) NextEra Energy, Inc. (NEE) Nordex AG (NRDXF, NDX1.DE) Northland Power Inc....

Tom Konrad CFA The Windstar Wind Farm. Photo credit: Western Wind Energy On July 10, shares of Western Wind Energy (TSX:WND, OTC:WNDEF)plummeted because of a $12.2 million shortfall in the 1603 cash grant from the US Treasury for the company’s Windstar wind farm compared to the application.  In order to reassure skittish investors, the company held a conference call on Monday, July 16. On the tenth, I thought that investors should write off the 1603 cash grant shortfall, despite the fact that the company intended to send a delegation...

by Tom Konrad Ph.D., CFA Last week, a Bloomberg reported on a rumor that Brookfield Asset Management (BAM) was in talks to buy Abengoa's (ABGOY) stake in its former YieldCo Atlantica Yield (ABY).  Atlantica had been looking for a new sponsor for well over a year since parent Abengoa filed for bankruptcy. Purchasing Yieldcos (companies that own clean energy infrastructure and use the cash flows to pay large dividends to shareholders) is not new to Brookfield.  Not only has BAM long sponsored Brookfield Renewable Partners, LP (BEP), a limited partnership that has essentially been a Yieldco since before the term was...

Calpine Corp. (CPNLQ.PK) said it plans to sell about one-fifth of its power plants in a bid to emerge as a leaner company focused on its profitable geothermal and gas-fired operations. The company also said it plans to close three offices and cut about 775 jobs. Without identifying the plants, Calpine said the sale of about 20 facilities would allow it to focus on core assets and key markets. The company's largest power markets are California and Texas. The plans drafted by CEO Robert May should allow the company to save over $150 million a year and...

Tom Konrad CFA Clean energy yieldcos buck the general trend by paying out a large proportion of cash flow to investors, and rapidly increasing their dividends at the same time.  The key to this trick has been their rapidly appreciating stock prices. High yield companies generally grow slowly, while high growth companies have low dividend yields. Normal companies grow by investing some profits in new business opportunities.  Early stage growth companies typically retain all their earnings to invest in new business.  More mature companies have fewer opportunities, and so share a larger proportion of...

By Tim Conneally The pool of public solar yieldcos keeps growing. Just before the Christmas holiday, Sol-Wind Renewable Power LP filed for a $100 million initial public offering with the Securities and Exchange Commission. This will be the eighth Yieldco to debut since 2013, and the stock will trade on the NYSE under the symbol SLWD. But there's something different about this one. Sol-Wind is a yieldco that utilizes a Master Limited Partnership (MLP) structure, so it will be taxed differently from the other Yieldcos. Generally speaking, a Yieldco is similar to MLPs by nature, but the taxation...

by Debra Fiakas CFA   The atmosphere started getting uncomfortably hot for power developer Abengoa SA (ABGB:  Nasdaq)  in early August last year  -  and it was not just the seasonal high temperatures in the company’s home town of Seville, Spain.  Management had finally admitted that operations could not generate as much cash as previously expected, causing worries about Abengoa’s ability to meet debt obligations.  At the heart of the company’s cash flow woes is the reversal of Spain’s policies on solar power that has reduced subsidies and feed-in tariffs for solar power producers. In August 2015,...

German utility E.On AG launched a 29.1 billion euro ($34.72 billion) all-cash bid for ENDESA (ELE) on Tuesday, topping a previous offer from Gas Natural by more than 30 percent and threatening to disrupt carefully laid plans for Spanish power-market consolidation. Endesa said in a statement that the E.On offer was "clearly" the better of the two, but added that it still did not adequately reflect Endesa's true value. Shares of Endesa were up 15% in yesterday's trading.

Tom Konrad CFA In the first article of this survey of yield cos, I looked at the possible reasons for the seemingly endless enthusiasm for US-listed clean energy yield cos.  Here, I'll take a look at how these yield cos are constructed, and why investors should prefer one structure over another. Who's Your Daddy? Most yield cos have been created by clean energy project developers in order to create a ready, low-cost buyer for those projects.  With the recent string of very successful IPOs, the capital available for such projects may prove...

Tom Konrad, CFA Boralex Inc. made an offer to buy out the Boralex Power Income Fund on May 19.  The price is reasonable.  Boralex (BLX.TO, BRLXF.PK) announced on May 2 that it would offer C$5 per share in convertible bonds for all outstanding shares of the Boralex Power Income Fund (BPT-UN.TO, BLXJF.PK) that it did not already own in an acquisition approved by both boards.  As usual with mergers, the Boralex Power Income Fund's ("the Fund's") unit price jumped from C$4.61 to C$4.90 the next day, but then if started to fall back as people had...

by Shawn Kravetz In ten years of solar investing, we have never encountered an opportunity as obscure and potentially lucrative as Renewable Energy Trade Board Corporation (OTCPK:EBODF).  Disclosure: I am long EBODF. Before walking through the long thesis, we must caution potential investors that EBODF "went dark" with the SEC in March 2013. However, we have conducted rigorous due diligence on the ground in Asia and through the Hong Kong Stock Exchange filings of Goldpoly New Energy Holdings (0686.HK) - EBODF's sister company sharing the same parent/leading shareholder - China Merchants New Energy Group (part of massive Chinese...

by Tom Konrad, Ph.D., CFA It's been a busy several days in the YieldCo space. On February 5, 8point3 Energy Partners (NASD:CAFD) announced an agreement to be acquired by an infrastructure investment fund managed by Capital Dynamics. While I was still writing an article on why the sale price was at a virtually unheard of discount relative to the stock market price, two more YieldCo deals were announced: NRG Energy (NYSE:NRG) agreed to sell its sponsorship stake in NRG Yield (NYSE:NYLD and NYSE:NYLD/A) to Global Infrastructure Partners, and YieldCo TerraForm Power (NASD:TERP) made an offer to buy out Spanish YieldCo Saeta Yield (Madrid:SAY) at a 20 percent...

By Jeff Siegel If you're a regular reader of these pages, you know I'm bullish on alternative energy yieldcos. In fact, I've covered Pattern Energy Group (NASDAQ:PEGI) and NRG Yield (NYSE:NYLD) at length. The way I see it, yieldcos are the next big alternative energy investments for retail investors. They enable regular investors to buy into multiple alternative energy assets that produce steady cash flow. For those not particularly keen on risk, but still want exposure to the burgeoning alternative energy space, this is a great way to do it. The bottom line is that...

The Pendulum Swings to Cash Over the long term, market cycles are characterized by swings of sentiment, and changes in investor preferences.  The recent cycle was characterized by an emphasis on growth and capital gains.  In the current financial crisis, investors are again learning the value of cash, and companies which produce steady cash flow and dividends.  Since the market tends to overshoot, I expect there will be a time a few years hence when, once again, the first question any investor asks about a stock is "What's the yield?" If I'm right, companies with strong cash flows that...