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Released July 13, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--NRG Energy (NYSE:NRG) (Princeton, New Jersey), the largest independent U.S. power producer, plans to raise as much as $4 billion through asset sales over the next three years, in an effort to slash debt by $13 billion. Between half and all of the company's renewables-focused subsidiary, NRG Yield, is on the chopping block, according to executives. Industrial Info is tracking nearly $4 billion in active projects involving NRG, including about $890 million in renewable projects.
The decision represents a strategic reversal for NRG, which has lost more than $7 billion since early 2015. The company reported strong results from its coal-to-gas and renewable energy projects earlier this year, and seemed poised to make further investments in those areas. Executives said they were planning to reduce capital expenditures in 2017, but emphasized core business properties and the GenOn nuclear business as likely targets. For more information, see March 1, 2017, article - NRG Reduces Capital Spending for 2017, Shifts Focus to Natural Gas, Renewables.
Two of the largest active NRG projects in the renewable sector can be found in Texas: the $250 million Buckthorn Solar Plant in Fort Stockton and the $190 million Buckthorn Windfarm near Stephenville, as well as the latter's $12 million substation. The solar farm, which is undergoing site preparation, would generate up to 200 megawatts (MW) using First Solar Incorporated's (NASDAQ:FSLR) (Tempe, Arizona) mono-crystalline photovoltaic (PV) panels; the windfarm, under construction and set to wrap up later this year, would generate up to 100.5 MW using 29 turbines from Vestas (Aarhus, Denmark). For more information, see Industrial Info's project reports on the Buckthorn solar plant, windfarm and substation.
NRG won the bid to acquire the Buckthorn solar facility from bankrupt SunEdison Incorporated (Maryland Heights, Maryland) in September.
The culprit, not surprisingly, is low prices for renewable sources and natural gas from domestic shale fields, which have proven a headache for wholesale power-generation companies. Last month, Moody's Investors Service, a unit of Moody's Corporation (NYSE:MCO) (New York, New York), reported that the PJM Interconnection (Valley Forge, Pennsylvania) has become a "killing field" for older, less-efficient merchant power plants. For more information, see June 9, 2017, article - Moody's: Marcellus Gas 'Wreaks Havoc' on PJM Merchant Generators.
NRG also plans to divest 6 gigawatts worth of coal and gas-fired energy generation, although it has not detailed which properties would be affected. Industrial Info is tracking activity at 22 operational NRG facilities in the 12 Mid-Atlantic and Midwestern states for which PJM is the regional grid operator, nine of which use coal or natural gas as an energy source.
NRG only has two capital projects under way at fossil fuel-fired power plants: a $320 million unit addition at the Canal Power Station in Sandwich, Massachusetts, which would add a 330-MW dual-fueled combustion turbine from General Electric (NYSE:GE) to the natural gas-fired, 1,165-MW facility, and the $144 million construction of the P.H. Robinson Power Station in Bacliff, Texas, which would generate 390 MW from six gas-fired GE combustion turbines. For more information, see Industrial Info's project reports on the Canal and P.H. Robinson stations.
Declining fortunes in the nuclear sector also have affected NRG: The GenOn business filed for bankruptcy last month, and upon emergence will no longer be owned by NRG, according to a presentation by executives.
In February, NRG agreed with activist investors Elliott Management and Bluescape Energy Partners to set up a committee to explore divestment and other cost-cutting options, which resulted in these proposed asset sales. The two investors have an 8.2% stake in the company, according to Reuters.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The decision represents a strategic reversal for NRG, which has lost more than $7 billion since early 2015. The company reported strong results from its coal-to-gas and renewable energy projects earlier this year, and seemed poised to make further investments in those areas. Executives said they were planning to reduce capital expenditures in 2017, but emphasized core business properties and the GenOn nuclear business as likely targets. For more information, see March 1, 2017, article - NRG Reduces Capital Spending for 2017, Shifts Focus to Natural Gas, Renewables.
Two of the largest active NRG projects in the renewable sector can be found in Texas: the $250 million Buckthorn Solar Plant in Fort Stockton and the $190 million Buckthorn Windfarm near Stephenville, as well as the latter's $12 million substation. The solar farm, which is undergoing site preparation, would generate up to 200 megawatts (MW) using First Solar Incorporated's (NASDAQ:FSLR) (Tempe, Arizona) mono-crystalline photovoltaic (PV) panels; the windfarm, under construction and set to wrap up later this year, would generate up to 100.5 MW using 29 turbines from Vestas (Aarhus, Denmark). For more information, see Industrial Info's project reports on the Buckthorn solar plant, windfarm and substation.
NRG won the bid to acquire the Buckthorn solar facility from bankrupt SunEdison Incorporated (Maryland Heights, Maryland) in September.
The culprit, not surprisingly, is low prices for renewable sources and natural gas from domestic shale fields, which have proven a headache for wholesale power-generation companies. Last month, Moody's Investors Service, a unit of Moody's Corporation (NYSE:MCO) (New York, New York), reported that the PJM Interconnection (Valley Forge, Pennsylvania) has become a "killing field" for older, less-efficient merchant power plants. For more information, see June 9, 2017, article - Moody's: Marcellus Gas 'Wreaks Havoc' on PJM Merchant Generators.
NRG also plans to divest 6 gigawatts worth of coal and gas-fired energy generation, although it has not detailed which properties would be affected. Industrial Info is tracking activity at 22 operational NRG facilities in the 12 Mid-Atlantic and Midwestern states for which PJM is the regional grid operator, nine of which use coal or natural gas as an energy source.
NRG only has two capital projects under way at fossil fuel-fired power plants: a $320 million unit addition at the Canal Power Station in Sandwich, Massachusetts, which would add a 330-MW dual-fueled combustion turbine from General Electric (NYSE:GE) to the natural gas-fired, 1,165-MW facility, and the $144 million construction of the P.H. Robinson Power Station in Bacliff, Texas, which would generate 390 MW from six gas-fired GE combustion turbines. For more information, see Industrial Info's project reports on the Canal and P.H. Robinson stations.
Declining fortunes in the nuclear sector also have affected NRG: The GenOn business filed for bankruptcy last month, and upon emergence will no longer be owned by NRG, according to a presentation by executives.
In February, NRG agreed with activist investors Elliott Management and Bluescape Energy Partners to set up a committee to explore divestment and other cost-cutting options, which resulted in these proposed asset sales. The two investors have an 8.2% stake in the company, according to Reuters.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
