GREEN ENERGY CHRONICLES
John's latest update on graft, corruption and waste in the energy sector.
Renewable Energy Is An Economic, Political And Environmental Crime
SunEdison yieldco TerraForm Global (GLBL) has 90 days to file its delayed 10-K or be required to immediately repay $810 million in defaulted loans, according to a U.S. Securities and Exchange Commission filing.
Goldman Sachs and other lenders backing the 9.75% senior notes, due in 2022, agreed to reduce TerraForm Global’s commitment to $350 million. TerraForm Global has until June 30 to comply with Nasdaq listing requirements by turning over the late 10-K, the annual financial report that the SEC requires of all publicly traded companies. A number of energy companies have formed publicly traded yieldcos designed to hold assets and provide steady cash flows and certain tax benefits.
Fellow yieldco TerraForm Power (TERP) is also facing Nasdaq threats of delisting. Neither SunEd nor either of its TerraForm yieldcos have turned over their 10-K reports. Parent SunEdison technically defaulted on $725 million in second-lien loans — unless extensions were granted — before declaring bankruptcy earlier this year.
YIELDCO STOCK CHART DELINES
In some ways, yieldcos were imported from Canada, where a financial vehicle known as the income trust had attracted the attention of U.S. financiers looking for ways to raise cheap capital for renewable energy projects.
Yieldcos took off in the United States in July 2013 when NRG Energy launched NRG Yield to great fanfare, with some analysts suggesting that it would “transform” the market.
Then, about a year ago, a series of events hit the market, tanking yieldco shares across the board. It began with investors concerns about the effect falling oil prices would have on master limited partnerships (MLP) and with the overall decline in stock prices. Those conditions were exacerbated when SunEdison’ announced plans to acquire Vivint Solar using $789 million from TerraForm Power to partially fund the acquisition. The deal collapsed in March, but it scared potential investors.
That raises the question: Is the yieldco model broken?
“The growth model broke because it was unsustainable,” says Tom Konrad, a financial analyst and money manager at AltEnergy Stocks.
LIST OF YIELDCOS
Firstly, we see 4 yieldcos that are only traded in Canada which represent 20% of the overall portfolio by market cap (market cap in USD billions) :
|Company Name||Type||Ticker||Yield||Mkt Cap|
|Northland Power Inc.||Nat. Gas||NPI||6.75||2.04|
|TransAlta Renewables, Inc.||Wind/Hydro||RNW||6.72||1.81|
|Innergex Renewable Energy, Inc.||Multiple||INE||5.78||0.83|
|Capstone Infrastructure Corp.||Multiple||CSE||9.74||0.22|
Then we have 6 yieldcos that are only traded in the U.K. which can be seen below (market cap in USD billions):
|The Renewables Infrastructure Group Ltd.||Wind/Solar||TRIG||5.95||1.04|
|Greencoat UK Wind Plc||Wind||UKW||5.48||0.82|
|Bluefield Solar Income Fund Ltd.||Solar||BSIF||6.73||0.45|
|NextEnergy Solar Fund||Solar||NESF||5.3||0.29|
|Foresight Solar Fund||Solar||FSFL||5.94||0.45|
|John Laing Environmental Assets Group Ltd||Multiple||JLEN||2.74||0.37|
This leaves us with one last company that is traded outside the U.S which is a Spanish company called Saeta Yield and which makes up 3% of the portfolio by market cap:
|Company Name||Type||Ticker||Yield||Mkt Cap|
|Saeta Yield (SPAIN)||Wind/Solar||SAY||2.77||0.83|
This gives us 10 remaining companies that are all U.S. traded, but that are not all yieldcos. Sunedison (NYSE:SUNE) and FirstSolar (NASDAQ:FSLR) are included in the index. We’ll drop Sunedison because while they were responsible for the creation of Terraform (TERP), they are not a a yieldco. First Solar helped create the most recent solar yieldco IPO, 8point3, so we’ll replace them with 8point3. (Wondering where the name 8point3 came from? It’s the amount of time it takes sunlight to reach the earth; 8.3 seconds). We are then left with the following 8 U.S. traded yieldco stocks:
|Company Name||Type||Ticker||Yield||Mkt Cap|
|Brookfield Renewable Energy Partners LP||Hydro||BEP||5.73||4.15|
|Abengoa Yield Plc||Multiple||ABY||6.3||2.54|
|Pattern Energy Group, Inc.||Wind||PEGI||5.94||1.82|
|NRG Yield, Inc.||Multiple||NYLD||4.15||1.14|
|NextEra Energy Partners||Wind/Solar||NEP||2.3||0.76|
|Hannon Armstrong Sustainable Infrastructure||Multiple||HASI||5.18||0.65|
NEW YORK – When solar energy giant SunEdison, together with its spinoff TerraForm Power, acquired wind-turbine powerhouse First Wind Holdings LLC for $2.4 billion in May 2015, the deal was touted as “transformative,” as SunEdison’s stock rose 29 percent and TerraForm gained 27 percent.
But when SunEdison finally declared bankruptcy on April 21, investors were forced to face the sad reality that the company’s cash flows from its various solar and wind-turbine energy projects had proved to be insufficient to cover debt-payment requirements.
Now, the First Wind acquisition that arguably made SunEdison “one of the world’s largest, if not the largest renewable energy developers,” has returned to haunt the renewable energy conglomerate. New York-based investment firm D. E. Shaw & Co. and Chicago-based Madison Dearborn Partners have filed suit against TerraForm Power, seeking $231 million in deferred payments the two investment firms claim they were owed but never paid in the SunEdison acquisition of First Wind.
According to OpenSecrets.org, D. E. Shaw & Company contributed in excess of $5.6 million in 1992-2014, primarily to Democratic Party political candidates.
As noted by Peter Schweizer in his 2011 bestselling book “Throw Them All Out,” David E. Shaw, the firms founder and the largest shareholder in First Wind, was a two-time bundler for President Obama and one of the top three donors to the Democratic Party prior to First Wind receiving $232 million in Obama stimulus funds, including $115 million for a wind-turbine project in Hawaii called Kakuku Wind for which First Wind created a total of 125 jobs.
Shaw served on the President’s Council of Advisors on Science and Technology under President Clinton in 1994 and President Obama in 2009.
Lawrence Summers, a part owner of First Wind, was a part-time employee of D. E. Shaw from 2006 until 2008, earning approximately $5 million with the New York-based hedge fund, working one day a week for the firm in an advisory capacity, at what Business Insider calculated was a rate of $52,000 per day or $4,333 per hour.
This MUST READ paper analyzes the economic and political crimes.
NEWS FROM CANADA
The Ontario government has betrayed rural municipalities by approving new wind farms in places that have explicitly voted against them, mayors say — including just east of Ottawa.
We are subsidizing the wind industry.
4% of our power is from wind energy, yet it costs us 20% of our electrical bill.
Ontario pays 11-13.5 cents per kWh for wind power.
The average price in the U.S. is 7 cents.
The average price for Ontario nuclear, water and gas is 7 cents.
Ontario is the only province/state that charges HST, delivery, and regulatory fees on electricity.
Your rates increase every May and October
(Also increased in November, 2014 to pay for the $1billion loss in October)
The Globe and Mail claims to have seen a leaked confidential seven billion dollar Ontario master plan, for all new homes to use geothermal or electric heating by 2030, and to provide grants to retrofit older buildings.
Donald Trump On Energy Policy (MUST READ)
President candidate Donald Trump responded to ten questions submitted by the free-market energy advocacy group, American Energy Alliance (the advocacy arm of the Institute for Energy Research, of which I am founder and CEO). Overall, there is great promise of market-oriented reform, reinforcing Trump’s earlier statements about reigning in the US Environmental Protection Agency (EPA).
The questions and answers follow. For proponents of a fuel-neutral, pro-consumer, pro-taxpayer energy and climate policy, there is more to like than dislike below...
“8). Do you support a carbon tax? Do you support the Obama administration’s use of the social cost of carbon in rulemakings?
A. No and No.
9). Do you think federal agencies have abused the cost-benefit process to suit their political agenda? Would your administration end the process of underestimating costs and inflating benefits of agency regulations?
A. Yes and Yes.”
RENEWABLE ENERGY: LIGHTNING, FIRE, LAND USE AND LIABILITY
A team of storm chasers from Tea, South Dakota, spotted a wind turbine damaged by a lightning strike ear Ruthton, Minnesota. The Tea Storm Chasersgave me permission to post the image here.
One thing we do know: Lightning strikes on wind turbines happen frequently. A 2007 journal paper on lightning protection for wind turbines reported that lightning damage is the "the single largest cause of unplanned downtime in wind turbines."
Wind turbines seem to attract more than their fair share of lightning damage as compared to buildings and towers of a similar height. This has prompted research into why that might be and how turbines could be better protected. The distinguishing characteristic of a wind turbine as compared to, say, a cellular tower is obviously the giant, whirling blades. So what are the blades doing?
Most of us are familiar with cloud-to-cloud and cloud-to-ground lightning, but the sensors picked up a fairly extraordinary ground-to-cloud-to-ground strike during one storm. For most cloud-to-ground strikes of tall objects, fingers of positive charge called “leaders” often travel upward from the object before reaching a region of negative charge in a cloud. Current then courses downward through the path of that leader, through the object being struck, and into the ground.
In this case, a negative leader reached upward from the turbine and into an area of positive charge about 5 kilometers up. This is the kind of strike that can damage turbines so badly. In this case, however, there were both positive and negative charges interacting in the clouds, and the downward strike lashed out laterally, striking the ground fully 20 to 25 kilometers from the turbine.
Lightning Discharges Produced By Wind Turbines (MUST READ)
New observations with a 3-D Lightning Mapping Array and high-speed video are presented and discussed. The first set of observations shows that under certain thunderstorm conditions, wind turbine blades can produce electric discharges at regular intervals of ~3 s in relation to its rotation, over periods of time that range from a few minutes up to hours. This periodic effect has not been observed in static towers indicating that the effect of rotation is playing a critical role. The repeated discharges can occur tens of kilometers away from electrically active thunderstorm areas and may or may not precede a fully developed upward lightning discharge from the turbine.
The frequent upward directed discharges from wind turbines are poorly detected by conventional lightning detection networks and therefore have often been underestimated in risk studies. The capability of mapping upward leaders by the LMA offers a unique opportunity to investigate the frequency of events and the favorable conditions of occurrence. Moreover, the high-speed video record showed a poor screening effect between the developments of upward leaders from wind turbines at close distances. This needs to be considered when studying the initiation of leaders from multiple tall objects on the ground and in the risk assessment of lightning to wind turbines.
Finally, as wind turbines enhance conditions for the triggering of lightning artificially, given a background electric field provided by a thundercloud, it raises the question to what extent this anthropogenic cause influences regional lightning rates.
Wind farming is one of the leading industries in the renewable energy sector. However, the industry faces a number of challenges, such as opposition by wind farm lobbyists. Today’s research suggests that incidents of wind turbines catching fire are a big problem that is not currently being fully reported.
Why is there no federal requirement for wind farm operators to report fires?
A sensor in the turbine detected the fire. But an employee did not arrive on scene until the next morning, after the fire had burned itself out. The fire department was never notified, nor was any state agency. Had the blaze not occurred in winter with snow on the ground, the fire could have spread to the adjacent forest, a Maine forestry official has stated.
The wind industry claims wind turbine fires are rare. But the facts suggest otherwise. Vestas is not the only manufacturer plagued with fires linked to equipment failures. Hundreds of fires have occurred, and likely more, since there is no reporting requirement in many locations.
Paris, 17th November 2015 – Specialist renewable energy underwriter, GCube Underwriting Ltd. (GCube) has today launched a unique report into wind turbine fires, drawing from its extensive claims data and experience.Towering Inferno is the latest in a series of reports for GCube’s insured and broker community, analysing the root causes, impact and mitigation of wind turbine downtime events.
A track record of incidents – affecting almost every manufacturer and operator – has highlighted the inherent fire risk involved in the operation of modern wind turbines.
Despite the increasing use of fire suppression throughout the industry, turbine fire incidents typically result in the total or near-total loss of a multi-million dollar asset. GCube estimates that a wind turbine fire and its associated downtime will cost a project owner a total of $4.5 million on average.
Concerns about the safety of wind turbines have been fuelled further by recorded incidents of bush fires sparked by burning debris from turbine fires in high-risk locations such as South Australia and California. Similarly, as the number of projects increases in remote, forested regions of North America and Europe, so too does the risk of consequential forest fires.
LIVINGSTON CO, IL. (ECWd) –
Last Friday, another turbine caught fire in Livingston County, Illinois. It was close in location to the turbine fire from last summer (here) and part of Iberdrola Renewable’s Streator Cayuga Ridge project
There were high winds at the time, and local fire departments at the scene could do nothing but watch it burn.
Pontiac and Saunemin Fire Departments were on scene.
Reports of fires in wind farms are increasing, the researchers said. However, the true extent of these fires has been hard to assess because official reports about fires are either incomplete, biased or contain non-publically available data.
In an effort to get a clearer picture about the true extent of fires in wind farms, the team carried out an extensive analysis of data from sources including government reports, data from anti-wind farm lobbyists and information gathered by major newspaper investigations. In the future, the team aims to study the impact of fire in other renewable energy technologies such as solar panels.
RECENT SOLAR PLANT FIRES
(photo of Alberta wildfire)
The BLM manages 20.6 million acres of public lands with wind potential. The BLM has authorized 39 wind energy development projects, including connected-action projects that include electric transmission support authorizations, with a total approved capacity of 5,557 megawatts, enough to supply the power needs of over 1.5 million homes. The BLM has approved wind energy projects in Arizona, California, Idaho, Nevada, Oregon, Utah, and Wyoming. The BLM currently has some 29 pending wind energy development applications on the public lands.
Many state laws providing for the recovery of damages caused by escaped wildfire were enacted at the time when such fires were quickly extinguished and mostly occurred away from populated areas. In recent years, however, declining public budgets have resulted in decreased funding for firefighting costs, and more Americans have chosen to live in and around forested areas, many of which have become dryer and more flammable.Symptomatic of some of these changes is the United States Department of Justice’s increasingly aggressive use of state law to recover damages when fire escapes from private lands to damage federal property. As members of the Forest Landowners Association will likely recall, July of last summer witnessed the culmination of a high-profile case brought by the Department of Justice against California’s largest private landholder, Sierra Pacific Industries, Inc. (SPI). In that case, the federal government sought to recover damages reportedly approaching $1 billion resulting from the Moonlight Fire that burned 46,000 acres of timber lands in two National Forests. The fire allegedly started on and then escaped from private land (albeit not land owned by SPI) while being harvested by a logger under contract to SPI. SPI and the other defendants settled the case in July of 2012 for $122.5 million, comprised of $55 million in cash (of which SPI is to pay $49 million), plus SPI agreed to transfer to the federal government 22,500 acres of forest land worth an estimated $67.5 million.
In April of 2013, a U.S. Forest Service prescribed burn fire got out of control and ended up scorching nearly 11,000 acres of public and private lands southwest of Lemmon, South Dakota. One outbuilding was burned, along with fences, hay, and pastures.
UPDATE 1/5/2016: Private landowners and ranchers affected by the blaze filed a lawsuit against the U.S. Forest Service last week after their claims for damage compensation were denied. The U.S. Forest Service ruled that the agency was not responsible for damages even though they intentionally set the fire, against recommendations from local ranchers and weather forecasters. Stockgrowers Question Federal Fire Double Standards
Two Oregon Ranchers Sentenced to Jail for Range Fires
The Western Livestock Journal reports (http://bit.ly/1V3Znlr) that an eastern Oregon family with a long history in ranching is fighting to keep its cow/calf operation afloat against an onslaught of blows from the federal government. Two members of the Hammond family have been charged under the Antiterrorism and Effective Death Penalty Act of 1996 for starting two range fires that ended up on federal land.
One of the fires, set in 2001, was a prescribed burn on Hammond’s private property; a routine range improvement practice. The other fire, set on Hammond’s private property in 2006, was a back-burn intended to protect the ranch’s winter pasture from a lightening fire on adjacent federal land. Combined, the two fires burned about 140 acres of federal land. Now, although two Hammond family members have already done time in federal prison for setting these fires, they are facing a resentencing—now scheduled for late October—that could land them back in prison.
Citizen groups that oppose large-scale wind power development in Maine reacted strongly Tuesday to news that developers were proposing numerous wind farms in the state that would supply clean energy to southern New England. The groups have been fighting several of the projects individually, but were alarmed at the overall scale of the combined proposals.
“This will turn Maine into a wind plantation,” said Chris O’Neil, a spokesman for Friends of Maine’s Mountains.
The lake of toxic waste at Baotou, China, which as been dumped by the rare earth processing plants in the background
On the outskirts of one of China’s most polluted cities, an old farmer stares despairingly out across an immense lake of bubbling toxic waste covered in black dust. He remembers it as fields of wheat and corn.
Yan Man Jia Hong is a dedicated Communist. At 74, he still believes in his revolutionary heroes, but he despises the young local officials and entrepreneurs who have let this happen.
‘Chairman Mao was a hero and saved us,’ he says. ‘But these people only care about money. They have destroyed our lives.’
Vast fortunes are being amassed here in Inner Mongolia; the region has more than 90 per cent of the world’s legal reserves of rare earth metals, and specifically neodymium, the element needed to make the magnets in the most striking of green energy producers, wind turbines.
Nowhere is the waste issue more evident than in California, where landmark regulations approved in the 1970s require industrial plants like solar panel makers to report the amount of hazardous materials they produce, and where they send it. California leads the consumer solar market in the U.S. — which doubled overall both in 2010 and 2011.
The Associated Press compiled a list of 41 solar makers in the state, which included the top companies based on market data, and startups. In response to an AP records request, the California Department of Toxic Substances Control provided data that showed 17 of them reported waste, while the remaining did not.
The same level of federal data does not exist.
The state records show the 17 companies, which had 44 manufacturing facilities in California, produced 46.5 million pounds of sludge and contaminated water from 2007 through the first half of 2011. Roughly 97 percent of it was taken to hazardous waste facilities throughout the state, but more than 1.4 million pounds were transported to nine other states: Arkansas, Minnesota, Nebraska, Rhode Island, Nevada, Washington, Utah, New Mexico and Arizona.
Several solar energy experts said they have not calculated the industry's total waste and were surprised at what the records showed.
Solyndra, the now-defunct solar company that received $535 million in guaranteed federal loans, reported producing about 12.5 million pounds of hazardous waste, much of it carcinogenic cadmium-contaminated water, which was sent to waste facilities from 2007 through mid-2011.
Evergreen Solar Inc., one of Massachusetts’ rising green energy stars, is on its way to becoming one of the state’s top producers of hazardous waste.
The company generated more than a million pounds of hazardous waste last year, according to a report filed this week with the state Department of Environmental Protection, even though its new $450 million factory in Devens wasn’t operating at full capacity.
NOTE: Both above companies received over a billion dollars in stimulus money. Evergreen Solar received $527 Million in Taxpayer money from Obama plus about $50 Million from the state of Massachusetts ...only to go bankrupt shortly thereafter.
LATEST BANKRUPTCIES IN THE OIL AND GAS SECTOR
Here are some past articles at the Daily Bail that provide more: