Wednesday 13th June 2018


June 13, 2018

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Wind Watch

Five things we learned from our North American Power List
By Frances Salter

On 29th May, we published our first North American Power List, our definitive guide to the 100 most influential individuals working in the wind industry in North America. This is our take on where power resides in the wind business in the US and Canada, and the most important trends shaping the sector. Have you read it yet?

The report also featured interviews with a range of individuals in the final 100. Here is a taste of our rundown of the top things we learned from them.

1) The industry is powering on despite President Trump’s tax reforms.

Cover interviewee Ray Wood from Bank of America Merrill Lynch explained how the US wind industry has successfully mitigated the potentially negative effects of tax reform. Tax equity deals, for example, had been put under threat by the reduction of US corporation tax from 35% to 21%, meaning that businesses had less need of tax equity. But Wood noted that, although some tax equity investors had been cautious with their plans immediately after the tax reform vote, in the longer term the market has continued to thrive.

He added that there were more questions about the effect of phasing out the production tax credit. At present, he said that the PTC helps to cover around 35-40% of the full capital cost of a wind scheme, and so a combination of innovation by manufacturers, state incentives and the gradual phaseout of the PTC would help to plug the gap.

“It’s not all doom and gloom, but I would say there’s a fair amount of uncertainty about exactly what will transpire by 2020,” he said.

2) Consolidation could cut competition for developers

Lincoln Clean Energy’s CEO Declan Flanagan spoke to us about the trend for consolidation in the wind market. His company was bought in 2015 by I Squared Capital, ahead of the wave of acquisitions we’ve seen in the market in the last year.

Flanagan said he expected to see more buyouts of developers as institutions and utilities look to obtain the higher returns that come from taking development risk. While this could provide some experienced development teams with more financial clout, Flanagan said that buyouts of rival developers could also remove competition.

“Will [acquired developers] remain as nimble and as good?” he asked. “Or will the pitch be more open for us? I tend to view that as less competition in the medium term.”

3) Operations & maintenance offers attractive opportunities

Rafael Gonzalez, CEO of Enel Green Power North America, discussed how the use of big data analytics could help to cut operations and maintenance costs. Until a few years ago, he was responsible for running Enel Green Power’s O&M activity worldwide, but since 2014 has headed the business in the US and Canada.

He told us that there was a lot of value to be found in operating assets efficiently: “We will have more than 2,000 turbines here in the US, and all the information we are receiving in real time on each single turbine is giving us insights, continuously, about the performance and efficiency,” he said. By 2020, the company aims to run 85% of its activities for maintenance through predictive analytics.

4) Alberta has become a hotspot in the Canadian market

Dan Balaban, founder of Greengate Power Corporation, discussed why Alberta has become a focal point of wind activity in Canada; and told us about how his firm plans to expand its 450MW portfolio in the state with 1GW of wind and solar.

Balaban acknowledged that Alberta lags behind other states in terms of its adoption of renewables: “We’re more heavily dependent on coal today than any other province in Canada, so you know the route to renewables is something that makes sense.”

However, this reliance on coal is set to change after the publication of the state’s Climate Leadership Plan in November 2015, which included the phaseout of all coal-fired electricity by 2030, to be replaced by 5,000MW of renewables.

5) Community buyers are cutting out the middleman

Beth Waters, managing director at MUFG, told us about the trend for community choice aggregators (CCAs), which have an increasing effect on the market. CCAs are set up by communities within a particular area to bypass utilities and instead buy electricity directly from generators.

This is set to have affect the business models of established utilities: “Now the regulated utilities are waking up and saying: ‘Whoa, we’re losing business.’ They’re now scrambling to get back into the game and to play an important role in renewables going forward,” says Waters.

In the report, we have extensive interviews with each of these individuals, as well as profiles on our full top 100 and additional analysis about the composition of the final list. If you’re a member, you can download the full report here.

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