Business Irish

Sunday 23 October 2016

SunEdison's solar eclipse doesn't mean renewables are unsustainable

Jessica Shankleman and John Mulligan

Published 23/04/2016 | 02:30

SunEdison had splashed out $3.1bn on its expansion spree into the wind and solar sectors
SunEdison had splashed out $3.1bn on its expansion spree into the wind and solar sectors
Costs of solar key to growth: SunEdison CEO

It was the expansion spree that burnt SunEdison.

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The world's biggest developer of clean-energy projects, SunEdison, had splashed out $3.1bn (€2.7bn) - an amount that had already spooked investors and industry partners.

And with SunEdison now in bankruptcy in the United States with $16bn (€14bn) in liabilities, the company's collapse isn't reflective of the state of the renewables sector, say rivals.

Indeed, in the US and Europe investment and interest in wind and solar energy remains strong.

Irish firm Gaelectric, for instance, which is currently considering a sale of its wind farm assets for up to €350m, is attracting significant interest in the assets from potential buyers.

Other renewables operators in Ireland, such as John Mullins' Amarenco solar firm, are also active. Amarenco wants to build 40 solar plants in Ireland. It also owns solar plants in France.

Eddie O'Connor's Mainstream Renewable Power has been rolling out wind and solar farms across the world, in countries such as Chile and South Africa.

The collapse of SunEdison says more about its "relentless pursuit of growth" than the solar industry as a whole, said Jenny Chase, chief solar analyst for Bloomberg New Energy Finance.

She noted that other large developers such as First Solar have been profitable in recent years. SunEdison's restructuring may even benefit some other solar developers.

"The issue with SunEdison was they tried to grow too fast and took on too much debt," Andrew de Pass, chief executive officer of Conergy, said in an interview.

SunEdison is majority-owned by Kawa Capital Management, a Miami-based asset management firm that acquired assets of an insolvent German solar company three years ago. Conergy completed almost 500 megawatts of solar plants last year generating revenue of more than $500m and has "little" debt, he said.

The biggest impact from SunEdison's bankruptcy could be the potential sales of project assets offered in what's already become a buyer's market. Conergy may bid on such assets with a partner, said Mr de Pass.

Investment in the renewables industry hit a record $329bn last year, more than triple the investment of a decade ago, according to data compiled by Bloomberg New Energy Finance.

Governments everywhere are stimulating renewables and ratcheting back support for fossil fuels after agreeing in Paris in December to limit the emissions causing global warming. That deal was signed by more than 160 countries yesterday at the UN headquarters in New York.

"The strong outcome of the Paris agreement signals the beginning of the long term path towards decarbonisation through a range of critical areas including energy efficiency and renewable energy generation," said Gene Murtagh, the chief executive of Irish insulation firm Kingspan.

"The future is brighter than ever," said Alan Russo, senior vice president of sales at REC Solar, a commercial solar installer backed by the US utility Duke Energy.

GlassPoint Solar, which is developing systems to stimulate production of the most viscous grades of oil, said the industry is increasingly rivalling traditional fuels on price.

The cost of solar and wind technology has tumbled it the past few years, stimulating demand.

"The travails of one company will not stop the rise of solar power," said Rod MacGregor, co-founder of GlassPoint. "We stand at a watershed moment where solar technologies are both proven and economical in applications from rooftops to oilfields." (Bloomberg)

Irish Independent

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