NRG Closes on SunEdison's Solar and Wind Projects

NRG Closes on SunEdison’s Solar and Wind Projects

1,500 megawatts of SunEdison projects reborn at NRG. Plus, the SunEdison disaster timeline redux.

Eric Wesoff November 27, 2016

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Competitive energy supplier NRG Energy closed on its acquisition of bankrupt SunEdison's solar and wind projects, adding more than 1,500 megawatts to its 50,000-megawatt portfolio.

It's the final act in the dismantling of the once high-flying, self-proclaimed "renewable energy supermajor."

In 2014, SunEdison jumped into deep YieldCo waters with TerraForm Power and TerraForm Global. The company made a series of large, questionable acquisitions in First Wind and Vivint, as well as a slew of lesser corporate additions. SunEdison lost almost $1 billion in the first three quarters of 2015. When SunEdison's stock was at its peak, the company raised debt rather than equity -- and that debt load returned with a vengeance.

NRG is gaining a big chunk of SunEdison's portfolio and boosting its own utility-scale portfolio. Despite NRG's difference of opinion with its fired CEO, renewables champion David Crane, the company is not abandoning renewables. It continues to replenish projects for YieldCo partner NRG Yield.

According to a blog post, the acquired portfolio includes:

Joint ownership in a 530-megawatt fully built and contracted set of seven utility-scale solar projects in Utah
Ownership of 154 megawatts of fully contracted, partially constructed solar projects in Texas
Ownership of 1,100 megawatts of solar and wind assets across the U.S., including 111 megawatts of construction-ready assets in Hawaii

The contract with SunEdison provides for up to $183 million in payment, comprising an upfront payment of $124 million and subsequent payment of $15 million after the power-purchase agreements in Hawaii are closed. NRG may pay another $44 million if certain project benchmarks are met.

Outside of SunEdison’s federal bankruptcy court process, NRG also acquired a 29-megawatt portfolio of in-construction and construction-ready distributed solar projects.

Here's an updated SunEdison timeline.

SunEdison's tale of woe timeline

June 2014: The launch of SunEdison's first YieldCo, TerraForm Power.

Nov. 2014: SunEdison and TerraForm acquire wind developer First Wind for $2.4 billion.

July 2015: TerraForm Global, a YieldCo focused on investment in Africa and Asia, launches.

July 2015: SunEdison's $2.2 billion plan to acquire residential installer Vivint in cash, stock and notes does not delight investors. The stock price collapses upon the announcement.

Sept. 2015: CEO Ahmad Chatila sends a memo notifying employees of a 15 percent workforce cut. GTM's Stephen Lacey reports: "Sources within the company expressed worry and surprise that the cuts didn't impact the architects of the Vivint acquisition."

Dec. 2015: SunEdison revised the terms of its acquisition of Vivint.

Jan. 2016:

David Tepper, billionaire hedge-fund founder and 10 percent owner of TerraForm, sues SunEdison in an attempt to block Vivint assets (and debt) from being moved to the YieldCo.
Steve Tesoriere, an activist investor and architect of SunEdison’s YieldCo strategy, resigns from the board. COO Francisco Perez Gundin and Paul Gaynor (former First Wind CEO) depart.
SunEdison announced the pricing of $725 million of a second lien secured term loan intended to improve the company's liquidity position.

Feb. 2016:

SunEdison named Claire Gogel, formerly of David Einhorn's hedge fund Greenlight Capital, to its board of directors. Greenlight Capital has a 6.8 percent stake in SunEdison.
Vivint Solar shareholders approve SunEdison's $1.9 billion acquisition of the residential solar company.
Hawaiian Electric cancels three SunEdison projects on the islands worth $350 million, with $42 million already spent. Almost 100 workers lose their jobs, according to PBN.
SunEdison to sell its Japanese solar unit to Thai oil company Bangchak for $82 million, according to Fortune.
UBS cut its price target for the company from $2.00 to $0.75 per share. Many other equity analysts downgrade the shares as well.
SunEdison is selling its Malaysian silicon wafer factory and plans to close its Texas polysilicon factory.

March 2016:

SunEdison delays its 2015 and Q4 financial report as it resolves two internal investigations into the accuracy of its financial disclosures.
Goldman Sachs, Barclays, Citigroup and UBS, the banks loaning SunEdison ~$2 billion for its Vivint acquisition, “have balked at providing [the] loans,” according to the The Wall Street Journal. If the deal is not closed by March 18, either party could then walk away, reports WSJ.
SunEdison and TerraForm Power announce a $28.5 million settlement and termination of the Latin America Power acquisition.

April 2016

SunEdison entered Chapter 11 bankruptcy proceedings

June 2016

SunEdison CEO Ahmad Chatila resigned.

August 2016

GCL-Poly, a Chinese firm that produces solar polysilicon and wafers, as well as developing solar farms, bought SunEdison's once-billion-dollar silicon business for $150 million.

Nov. 2016