In much more than a change of names, enXco, a pioneer in U.S. renewables, has become EDF Renewable Energy and a full-fledged EDF company.
EnXco was acquired in 2002 by EDF Energies Nouvelles (EN), which at that time was 50 percent owned by French multinational utility and power group Electricité de France (EDF). With EDF’s acquisition of the remaining 50 percent of Energies Nouvelles, the San Diego-based enXco gains full access to resources matched by few U.S. renewables developers.
And though it is now 100 percent owned, explained EDF Renewables North America CEO Tristan Grimbert, the company will retain enough autonomy to allow it to be entrepreneurial and flexible.
EDF SA, Grimbert said, is 85 percent owned by the French government and 15 percent publicly traded. It owns utilities across Europe from London Electric to Edison Italy, had approximately 70 billion euros in revenues last year and an approximately 90,000-megawatt, largely nuclear installed capacity.
EDF’s well-known commitment to nuclear does not involve EDF Renewables. “Nuclear has a role to play, but there is a lot of work to do to lower costs without compromising safety,” Grimbert said. “It is a difficult play in the U.S. in the short term.”
EDF EN owns an installed renewables capacity in solar, wind, biomass and hydropower of approximately 4,300 megawatts, about 5 percent of the parent company’s generation.
The U.S. subsidiary’s 1,500-plus megawatts, approximately 40 percent of the EDF EN installed capacity, represents about 2 percent of the multinational giant’s generation capacity, according to Grimbert.
EDF Renewable Services, formerly an enXco branch, remains North America’s biggest third-party wind industry operations and maintenance services provider in a sub-sector expected to see exponential growth as tens of thousands of 2006 to 2011 boom-period turbines come out of warranty.
Grimbert, who took over at enXco in 2004, has recently been using EDF’s resources to diversify enXco’s former focus on wind.
Wind can be competitive in the Midwest, he said, as can solar in the Southwest, hydro in the Pacific Northwest and biomass in the Southeast. “You have to pick and choose the right technology,” he explained. “Leveraging the resources and the technical depth of the EDF Group, we have been able to diversify and build 1,200 megawatts in North America, and wind has only been half of that, whereas in the past, wind was the bulk of enXco’s portfolio.”
EDF provides capital, Grimbert acknowledged, “but also access to technical knowledge.” Another example, Grimbert noted, was the decision to move into pumped hydro storage.
“EnXco did not have pumped hydro engineers and expertise,” he said, “so we reached out to the EDF Europe hydro engineering center.” The result was the 1,000-megawatt Swan Lake North pumped hydro storage facility in southern Oregon.
Because of the current production tax credit (PTC) impasse, Grimbert said, the company has shifted its emphasis, but it has not abandoned wind.
“We look at a three-year to five-year horizon,” he said. "The way Congress is not passing anything right now, it is very likely 2013 is going to be a very bad year for the wind business. But the projects will be pushed out. The potential remains. We are not going to lay off anybody. We are going to grow slower. We are preparing for what the market will be and we have the resources and the backbone to carry it through.”
EDF resources also gave Grimbert the opportunity to capitalize on the PTC issue in the short term. The company is now hurriedly bringing to completion some 400 megawatts of wind capacity in time to meet the December 31, 2012 PTC qualifying deadline.
“We have the balance sheet and the skills to take that kind of risk,” Grimbert said. Perhaps only NextEra and a handful of other North American developers, he said, can do that.
He has difficulty understanding U.S. leaders' tendency to try to manage long-term energy interests with short-term policies. A perfect example, he said, is the current enthusiasm for shale gas.
“Yes, today it is cheap,” Grimbert said, “but remember three years ago it was more expensive, and three years from now, it will be more expensive again.” It is a conundrum, he added, that “cheap shale gas makes it unaffordable for the country to do the right thing environmentally.”
Other potential opportunities burdened by political shortsightedness, Grimbert said, are in offshore wind, smart transmission and microgrids. The opportunities are great but development costs are high and rising, he said. They are essentially prohibitive without the assurance of long-term policy supports.
Grimbert expects the PTC to be extended after the November election. It will be, he said, a “job-driven” extension, because politicians will be seeking to recover jobs lost due to the PTC extension delay.
A ten-year or fifteen-year policy is needed, he said, but right now it would be impossible to transition to “a non-PTC industry.” A national Renewable Energy Standard, requiring increasing portions of renewables, announced simultaneously with the two-year PTC extension, he said, would be ideal.
“Today, 80 percent of manufacturers in the wind industry are letting employees go,” Grimbert said. “This is not efficient. The U.S. is at 3 percent wind. Denmark has 29 percent. Spain has 19 percent. We can do much better.”