Goldman Sachs calls Renewables ‘compelling’ commits $40 Billion

Originally published on RenewEconomy by Giles Parkinson

Investment banking giant Goldman Sachs has declared the renewable energy sector to be one of the most compelling and attractive markets – and is backing up its talk with $US40 billion ($A46 billion) of made and planned investments.

Goldman Sachs is not the first big bank to talk up the renewable energy sector, or even “sustainable” investments. But it is one of the first to put real money behind it.

In 2012, the bank made a commitment to invest $US40 billion in renewable energy, and it has made a number of large equity investments, over and above the normal advisory and fund-raising work that is the usual bread and butter revenue for investment banks such as Goldman Sachs.

Goldman Sachs finds this market incredibly compelling, said Stuart Bernstein, who heads the bank’s clean-technology and renewables investment banking group, told Recharge in a recent interview in a story titled Goldman goes Green.

It is at a transformational moment in time.

Bernstein said the bank is taking a decades-long view and is convinced that renewable energy will be an important component of global GDP growth.

He dismissed suggestions that it was part of a PR campaign – such as BP’s infamous “Beyond Petroleum” pitch of a decade ago where it appeared to spend more in marketing than it did in new technologies.

It will be important from a societal perspective, and it will be good business for us and our clients, Bernstein told Recharge.

We want to be extraordinarily focused, involved and have the best franchise in the area. That’s how we think about it.

Among Goldman Sachs’ key investments are a recently-approved $1.5 billion investment for a near 20 per cent stake in Danish offshore wind energy developer Dong Energy.

Renewable Energy in action. Ivanpah solar power tower (CSP) now online.
Renewable Energy in action. Ivanpah solar power tower (CSP) now online.

It has also a substantial investment in BrightSource Energy, which is about to bring its huge Ivanpah solar power project (pictured) into full production – it will be the largest in the world.

Goldman Sachs also provided $500 million of finance to SolarCity, to allow the biggest solar installer in the US to expand its solar leasing business. Goldmans is one of a number of banks to do that –the latest was Bank of America/Merrill Lynch.

It has also been an early investor in First Solar, the largest solar PV manufacturer in the US, SunEdison, and made big money from the sale of Horizon Wind Energy to Portugal’s EDP for $2.15 billion in 2007.

Goldman’s commitment of $40 billion is based around a number of assumptions – that costs will continue to decline as efficiency improves, that solar and wind will reach grid parity without subsidies in the not-too-distant future, and that energy storage issues will also be solved.

It also believes that the position of coal at the top of the global fuel mix is eroding – something that it highlighted in a recent report that said the window for thermal coal was closing rapidly.

According to the Recharge article, much of Goldman Sachs’ investments will be focused on the emerging economies of Brazil, China, India and Mexico —along with developed economies such as Japan and South Korea that have also made a large commitment to renewables, and are reliant on expensive fossil fuel imports.

In Japan, Goldman Sachs has established a new independent power producer called Japan Renewable Energy (JRE) — to develop, build and operate solar, wind and other renewables projects. It is backed by the bank’s $3.1 billion GS Infrastructure Partners II fund (GSIP). It has already committed to a 250MW solar project in Okayama and a 40MW PV plant near Tokyo.

Goldman has paid more than $3400 million for a majority stake in an Indian wind energy business called Renew Wind Power, which plans to build 1GW of facilities within two years, and it is looking to build solar energy plants to supply mining operations in Chile, where even companies such as BHP Billiton are looking at alternatives.

Bernstein also heads Goldman’s venture-capital group, which has a key office in California’s Silicon Valley and which is focusing on late-stage venture companies. Recharge says it is also using its convening power to host conferences and forums for sector stakeholders.

Other investments include the FloDesign Wind Turbine, a start-up that was developing  an  experimental high-efficiency shrouded wind turbine, and South Korean wind turbine manufacturer CS Wind, which plans an IPO this year.

This article, Goldman Sachs Declares The Renewable Sector One Of The Most Compelling, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy with Giles ParkinsonGiles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

First Solar Awarded Contract To Build 250 MW California Solar Power Plant

by Joshua S Hill

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First Solar logo
First Solar logo

Photovoltaic solar systems provider First Solar announced on Wednesday that they had entered into an agreement with a subsidiary of NextEra Energy Resources to build a 250 MW solar power plant in Riverside County, California.

To be built on approximately 2,300 acres of mostly public land allocated by the US Bureau of Land Management, the McCoy Solar Energy Project will be located nearly 13 miles northwest of Blythe, California.

“First Solar is pleased to have this opportunity to work again with NextEra,” said Roger Bredder, First Solar’s Director of Business Development for the U.S. “And we are proud to continue providing jobs in Riverside County.”

Set to begin construction late next year, the McCoy Solar Energy Project is hoped to be completed in late 2016, providing up to 400 construction jobs along the way.

First Solar recently acquired a similarly sized project in Nevada from K Road Power Holdings, which is set to be able to generate enough clean energy to power approximately 100,000 homes, providing a nice baseline for what the McCoy Solar Energy Project may be capable of. The Nevada project — the Moapa Solar Project — is set to begin construction as soon as the fourth quarter of this year with completion aimed at the end of 2015.

First Solar have a total of 19 solar projects worldwide, with the majority centred in North America, and boast nearly 3 GW of contracted solar projects worldwide. First Solar’s impressive and growing portfolio sees the company ranked as the second largest contractor in the global power sector according to Engineering News-Review.

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This article, First Solar Awarded Contract To Build 250 MW California Solar Power Plant, is syndicated from Clean Technica and is posted here with permission.

About the Author

Joshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium. I love words with a passion, both creating them and reading them.

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Thin-Film Solar Power To Be Sold For Less Than Coal Power

by Nicholas Brown

Macho Springs Solar Park in New Mexico
First Solar installs of some of its CdTe panels atMacho Springs Solar Park in New Mexico. Photo Credit: boutmuet via Flickr

Update: Some sentences and links have been added to this post to provide better context and comparison.

Update #2: I’ve published two articles on energy subsidies in response to comments on this post regarding that matter. They are: “Energy Subsidies — Clean Energy Subsidies vs. Fossil Subsidies” and “Oil Subsidies & Natural Gas Subsidies — Subsidies For The Big Boys.”

According to a Power Purchase Agreement (PPA) between El Paso Electric Company and First Solar, electricity will be sold from First Solar’s thin-film solar panels to El Paso Electric Company for 5.8 cents per kWh (a good 4-8 cents cheaper than new coal, which is in the 10-14 cents per kWh range).

The name of the power plant is Macho Springs Solar Park. It is located in New Mexico, and it has an electricity generation capacity of 50 MW.

An interesting thing about this is that the average residential retail cost of electricity in the United States is 11.4 cents per kWh, which is twice as much as the price at which this power plant will be producing electricity. Also, the typical price of thin-film solar power is 16.3 cents per kWh, which is 2.8 times more.

Clearly, even compared to the wholesale price of electricity from the cheapest energy options, this is quite competitive.

First Solar may have a very bright future. CleanTechnica director Zachary Shahan recently had the opportunity to interview the CTO of the company while attending the World Future Energy Summit, International Renewable Energy Conference, and other Abu Dhabi Sustainability Week events. He has a post coming soon on the potential for thin-film solar to take the lead again in the solar panel market, as well as more on First Solar’s development plans. Stay tuned.

If you’re inclined to bring up subsidies, it should be noted that a Harvard Medical School study found that coal costs us an additional 9-27 cents per kWh in health costs. In a perfect world (economically), that would be added onto the LCOE of coal mentioned at the top (the 10-14 cents per kWh figure). That would bring the LCOE to 19-41 cents per kWh. Additionally, coal has received subsidies for about a century that dwarf anything solar has received.

As far as the plant above, the power purchase agreement should be signed by June.

Follow me on Twitter: @Kompulsa

Source: PV Magazine

This is part of an experimental “Sunday quickies” series in which we quickly cover stories we didn’t have time for during the previous week.

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This article, Thin-Film Solar Power To Be Sold For Less Than Coal Power, is syndicated from Clean Technica and is posted here with permission.

About the Author

Nicholas Brown has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, geography, and much more. My website is: Kompulsa.