A little more than a month ago, I reported on an EY report, its biannual Renewable Energy Country Attractiveness Index (RECAI), that indicated once again the United States was #1 for renewable energy investment attractiveness. It and China are basically always at the top. A big part of this is simply the scale of opportunity in these major markets (along with the cost-competitiveness of wind and solar). News from Hannon Armstrong Sustainable Infrastructure Capital (Hannon Armstrong) and ENGIE highlight this, as they have just committed to investing into a massive 2.3 gigawatt (GW) wind and solar power pipeline in the United States.
ENGIE is “the largest independent power producer (IPP) and energy efficiency services provider in the world” and we have written about it many times, including several fun exclusives with executives over the years. Hannon Armstrong is “a leading investor in climate change solutions” and we wrote about its investment in community solar power projects in the USA last year.
In this 2.3 GW investment, the companies are focusing more on the tall, white turbines than the flat, dark sunshine collectors, with 1.8 GW of wind power from 9 onshore wind farms in the plans and 500 MW (0.5 GW) of solar power from 4 large solar farms.
These 13 renewable energy projects are spread across 5 states and located in the following power markets: Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), PJM Interconnection (PJM), and Southwest Power Pool (SPP)
“Hannon Armstrong will participate in the cash flows from the operations of this diversified portfolio of renewable energy projects, while ENGIE will retain a controlling share in the portfolio and continue to manage the assets. …
“Under the agreement, Hannon Armstrong will take immediate ownership of 49% of 663 megawatts (MW) from four operating onshore wind projects. The remaining 1.6 GW of projects (five onshore wind and four utility-scale solar PV projects) currently under construction will be transferred into the partnership upon commissioning.”
Despite its massive global operations, ENGIE had 0 (zero) GW of renewable energy projects in the United States in 2018. That will be 2 GW this year. Expect the number to rise much higher in the coming decade. ENGIE is heavily invested in renewables elsewhere and a few years ago made a sharp shift toward cleantech.
Here are a few more notes about the investments from a press release about the news:
- With a weighted average contract life of 13 years, the portfolio’s cash flows are contracted with highly creditworthy off-takers who enjoy a weighted average credit rating of A+, including Amazon, Allianz, Ingersoll Rand, Microsoft, T Mobile, Target, Walmart, and Xcel Energy.
- Once fully funded, this portfolio is expected to significantly increase and diversify Hannon Armstrong’s balance sheet portfolio and support continued growth in recurring Net Investment Income.
- With a CarbonCount® score of 2.01 metric tons of carbon dioxide equivalent (CO2e) reduced annually per $1,000 invested, Hannon Armstrong’s equity investment will avoid an estimated 1.1 million metric tons of CO2e in the first year of operations, equivalent to the CO2e emissions from 125,000 U.S. homes’ annual energy use.
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