We published our latest Finance Quarterly report in April 2018 and for this issue we’ve taken a closer look at the US market ahead of Financing Wind New York on 30th May. The report is available for our members to download here. Here are eight highlights:

1. This may be the strongest year to date for wind PPAs.

Our deals database reveals that this has been the strongest quarter for power purchase agreements in nearly five years.

Notably, telecommunications company AT&T has signed two PPAs, with a combined size of 520MW. The largest of the two projects, owned by NextEra, totals 300MW.

As we explored in a recent blog, the US wind industry may be on track for its strongest year yet for PPAs. It’s encouraging to see this trend developing despite political uncertainty and falling wholesale power prices in the US.

2. TPI Composites make the case for building in emerging markets.

We enjoyed speaking to Steve Lockard of TPI Composites for this issue: as well as being CEO at TPI, he is also the incoming chair of the American Wind Energy Association.

We were interested to hear about his firm’s plans to expand outside of the US, due to the higher growth rate that can be found in emerging markets: for example, Mexico, Turkey and India, where growth is predicted to be around 9% annually up until 2026, compared with 0.8% annual growth in more mature markets.

3. Wind power in the US is becoming less partisan.

Steve also talked to us about the growing cross-party support for wind power in the US.

TPI is based in the historically Republican state of Arizona, but Steve says that the age where Republicanism was synonymous with being anti-wind is ending. He explains that given Obama’s outspokenness on wind and solar, some Republican adversaries opposed wind for political reasons, but now embrace it for creating jobs and economic activity.

4. The US needs a self-sufficient offshore wind supply chain.

Stephanie McClellan, who leads the University of Delaware’s Special Initiative on Offshore Wind, talked to us about the conditions needed to support growth of offshore wind in the US. She says there is great potential to develop a supply chain in the US, so that local workers and communities can benefit in the growth of this strategically-significant sector.

5. The New York Green Bank could go national.

We also spoke to the New York Green Bank, which was set up in 2014 to fund renewables projects in the state of New York.

The bank has not previously had a major focus on wind as none of the onshore wind projects planned in New York have been big enough to need NY Green Bank funding. However, the award of support for three new onshore projects totalling 734MW opens up new opportunities for the bank.

The bank’s president, Alfred Griffin, told us that the bank could be looking to expand across the US in the coming years. He argues that, rather than individual states setting up their own green banks, it could be more efficient to have one operating nationally.

6. Impacts of tax reform could be less negative than expected.

David Burton, partner at law firm Mayer Brown, gave us reasons to be optimistic about the impact of recent tax reform:

“The phrase I’ve used is that the wind industry dodged a bullet but was hit on the ricochet. The worst fears in terms of changing the tax credit rules weren’t realised, but there are some changes that are detrimental but not fatal.”

For example, David observed that the reduction of the federal corporate income tax rate means that sponsors of wind projects will, by and large, be able to raise less tax equity.

7. We’ve seen interesting developments in emerging markets.

Our databank shows there have been some exciting developments in offshore wind in emerging markets this quarter. For example, Statoil (now Equinor) made a particularly sizeable M&A deal in Poland, buying a 1,200MW project from Polenergia.

This quarter has also seen a good amount of offshore activity in Taiwan, with Ørsted winning environmental consent for four projects totalling 2.4GW.

8. Lots of M&A deals are happening in the Asia-Pacific region.

Our M&A tracker shows that there is ongoing consolidation of the wind sector in the Asia-Pacific region, especially India. This comes at a tough time for the Indian wind market, which is faced with political uncertainty and record-low prices. Developers are consequently faced with reduced profit margins, and so they see acquisitions as a way of reinforcing their positions. The most significant so far this year has been Renew’s purchase of Actis arm Ostro Energy for €1.2bn.