Corinne Vitte’s Post

Despite negative press around renewable energy investment trusts, we are seeing strong demand for generation assets from other financial buyers and operators. Ready to build assets are also well bid and while grid connection timetables remain challenging there are signs this is improving. Listed funds have undoubtedly been large buyers of UK renewables projects over the last 10 years but they were never the only ones and alternative buyers are already stepping in and driving strong transaction levels in 2024. https://lnkd.in/e3T2-JJ8

The energy transition posts a tremendous opportunity for private equity investors. The scale of the investment requirement makes private capital a “must have” and a broad spectrum of energy transition opportunities, particularly in “hard to abate” solutions, where direct electrification does not provide an efficient solution, offer a risk and return profile well suited to private equity fund expectations, with significant value enhancement and upside potential. Energy transition investments do, however, present novel or enhanced risks that will need to be well understood and carefully managed to ensure that they facilitate and do not hamper successful return generation and a timely exit. Click here to learn more: https://bit.ly/3JaUCGg Authored by: Shariff Barakat, Jesse Betts, Ike Emehelu, Jessica Hammons, Alex Harrison, Matt Kapinos, Shaun Lascelles, Simon Rootsey, David Sewell, Becky Fielding #AkinPE #PrivateEquity #EnergyTransition

Check out the latest post in Akin's The Road Ahead for Private Equity series, focused on energy transition investment opportunities. #AkinEnergy #AkinPE

It was great to talk about illiquid assets, renewable energy assets in particular, and their place in investor portfolios. With what's on the horizon with interest rates, political uncertainty and the impact this has on markets this is a good time to look at these assets. Thanks IMAP - Institute of Managed Account Professionals for the opportunity.

Equity Valuation gets a big contribution from expected future profits and dividend payouts from new investments on projects and businesses. The brutal reality is that a "big chunk" of green energy profits have disappeared from the business plans looking towards 2030+, given a harsher business reality and higher structural risks around their expected revenues. Without Governments stepping in with more subsidies, more shareholder dilution through new shares issuance at historically low share prices is to be expected at some point in the future. Renewables Industry Consolidation seems to be upon us, opening wider doors for bigger M&As along this decade. Upstream LNG, however, is now in its Golden Era and has very solid ROEs expected for the following decades. #renewables #windpower #solarpower #batteries #bess #natgas #naturalgas #oilandgas #powermarkets #investmentstrategies #energytransition #greenenergy #energymarkets #lng #lngindustry

The Times UK writes, not long ago, clean energy funds were the darlings of the investment trust world. Rock-bottom interest rates and a clamour for strategies that focused on ESG issues fueled a decade-long boom in funds backing wind, solar and battery storage assets. By 2020, the sector traded at an average premium of almost 20% compared with the value of underlying assets. Greencoat UK Wind, the oldest and largest clean power investment trust, raised just over £1B in equity in 2020 and 2021, almost a third of its stock market value. Today, the GreenCoat trust trades at a discount of just over 10% compared with its net asset value (NAV). Clean energy funds overall are priced at an average discount of about double that amount. There are questions not only over where interest rates need to settle for share prices to move back in line with net asset values, but also whether they will ever attain the valuations achieved without interest rates returning to sub-one-per-cent lows. Meanwhile, London's nascent battery storage funds sector is labouring under questions about cashflow. Gresham House Energy Storage, Gore Street Capital's Energy Storage Fund and Harmony Energy Income Trust trade at anywhere between 45% and 55% below their net asset values. Battery funds largely generate revenue by exploiting differences in wholesale power prices, buying energy when it is cheap and selling it back to the market when prices are higher. A large decline in energy prices is one factor that has set back battery funds. Harmony, along with Gresham, has scrapped dividends for this year. "The lesson we've learnt has been that taking an asset class that has [an unpredictable] merchant revenue profile and trying to pledge a fixed level of dividend is not always deliverable," Max Slade, an adviser at Harmony Energy, said. When interest rates were close to zero, investors mistakenly viewed renewables as a bond proxy, according to Alex O'Cinneide, the CEO of Gore Street Capital's investment committee. “It's not a proxy for a bond in that we are selling a service, we're selling electricity." Our Take 1: The article seemingly suggests the "dumb money" days of funds investing in renewables based on the glib reasonings that come with easy money and naive plans to transition the world's energy sysyem to uber-expensive non-solutions are now a thing of the past. Let's hope so.🤞 Our Take 2: Boy, the huge discount that those battery funds are trading is eye-popping, no? Our guess is this kind of underperformance will prove rampant in many markets in the long-term, including the US. Expensive short-term capacity only has a chance of working when power prices are both high and volatile—and that's not a situation adminstrators or politicians can survive for long. ⚡🔋👀 #batteries #energy #energytransition

What is determinable and actual is the time value of money. What is determinable is the calculation of value based on real assets. A stock price trading at a discount based on net asset value is readily determinable. The market and the human mind are both capable of making the connection. Proliferation of DEI , ESG policies and other means of espousing and justifying an existing and further impending dystopia as a means of counteracting this encircling cloud of gloom and despair are hopefully beginning to have the opposite effect - an awakening and, an enlightened return to rationality, reason and responsibility.

#TBT: Between 2009 and 2018, the U.S. Department of the Treasury (with support from the National Renewable Energy Laboratory) ran one of the largest #cleanenergy grants programs in recent memory: Section 1603 under the Recovery Act (ARRA). Section 1603 was intended to restart credit markets after the financial crisis, when tax equity investing dried up. I had the good fortune to oversee the 1603 program team for most of its existence. Section 1603 had pretty broad economic and #energytransition impacts: $26.2 billion in public funds deployed, $68 billion of private capital crowded in, and 109,000+ projects deployed nationally across a variety of technologies from #hydro and #offshorewind, to #residentialsolar, #concentratedsolar, and #biomass. And aside from the numbers, Section 1603 also piloted many concepts which have helped inform everything from how #greenbanks operate down to the mechanics of the #IRA, the Greenhouse Gas Reduction Fund (#GGRF), #DirectPay & #transferability. Unbeknownst to me, while I was at Treasury managing the granting organization, one of the firms on the other side of the table was CohnReznick LLP, which was advising dozens of project developers on pathways to deploy hundreds of millions of dollars of clean energy investment from the program. I never could've imagined that one day, I'd end up working alongside those same folks - and now that I'm here, we have put together a Lessons Learned piece about the 1603 program. This reflects experiences on both sides: from my experiences on the Grants Management Office side that was analyzing the capital stack, approving investments and responding to dozens of GAO, OIG and Congressional inquiries; and from the Project Finance side, where the CohnReznick team was working with developers to leverage the #ITC and #PTC and crowd in capital. We hope these are of value to today's IRA and GGRF participants. https://lnkd.in/e5k2-ETU Frank Banda, CPA, CFE, PMP Anton Cohen Joel Cohn, CPA (he/him) Christopher Livingstone Jenny Brusgul Christopher Griffin, CPA, CGMA Abby Rollins Amanda Rice Gibbs Roman Castillo Jessie Handforth Kome Michael Brewster Leah Halevy #solar #netzero #transition #energy

Ted and I met when he was working on enormous Treasury programs and I was dealing with merely huge HUD programs. I think this article provides practical, hard-earned insights into key grant management considerations, GGRF and otherwise.

With its large pool of institutional investor funds and robust private client investor market, Australia ticks most boxes for global investors. But how are real-world changes – most notably the drive to reduce carbon emissions and the shift to renewable energy – making Australia an even more attractive proposition? Read our latest article to find out why fund managers are looking to Australia for investors and assets: https://lnkd.in/gpcnr-cp #Australia #funds #renewables