Most people know very little about the true economics in the solar and wind industry. Even less understand the cryptic disclosures in an SEC filing of reports from FERC. Yet the financial inventors are brilliant in concealing the simple business model that is supposed to generate earning from real economic activity. Let’s be generous and report on the public relations announcement, 5 Slides That Show Why SunEdison Bought First Wind. Reading such glowing projections might attract investors into the SunEdison, TerraForm Power Up Solar ETFs.
“SunEdison is among the largest holdings in both the Guggenheim Solar ETFs (TAN) and the Market Vectors Solar ETF (KWT ), which climbed 5.1% and 3.8% respectively.
These two solar ETFs are alone in giving meaningful weight to TerraForm, SunEdison’s partner “yieldco” that went public in July, according to research firm XTF.”
Are you ready for some government and private sector newspeak? Note the following appears on the website of NREL – a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. – A Deeper Look into Yieldco Structuring.
“A yieldco is a dividend growth-oriented public company, created by a parent company (e.g., SunEdison), that bundles renewable and/or conventional long-term contracted operating assets in order to generate predictable cash flows. Yieldcos allocate cash available for distribution (CAFD) each year or quarter to shareholders in the form of dividends. This investment can be attractive to shareholders because they can expect low-risk returns (or yields) that are projected to increase over time.”
Surely you got that these “yieldco” are even better than derivatives, RIGHT???
Before you call your broker, review a recent edition of the BATR RealPolitik Newsletter on the topic – Another Green Energy Fraud. When Bloomberg announces that SunEdison, TerraForm to Acquire First Wind for $2.4 Billion, they are not disclosing the entire story.
“Expected to close in the first quarter, the purchase will consist of a $1.9 billion upfront payment and $510 million dependent on First Wind completing backlog projects.
TerraForm will add 521 megawatts of First Wind projects to its portfolio under the deal, with 1.6 gigawatts of projects expected to be developed by SunEdison and dropped down into TerraForm in 2016 and 2017, the companies said in the statement.”
The sordid history of First Wind strikes a record of questionable financial dealing, concealed debt obligations, flipping LLC ownership and holding company discrepancies. It came as no surprise that First Winds bizarre attempt to sell off their self proclaimed core projects fell flat. A local Bangor Maine newspaper has taken the lead on real investigative reporting. First Wind sale means end of $333 million partnership with Emera is but one in a series of damaging evidence on the shady business practices of First Wind.
“Ending a partnership challenged twice before state regulators and in court, Nova Scotia-based Emera has sold its interest in a $333 million joint venture with First Wind, which was purchased Monday by a Missouri-based renewable power developer.
Emera announced Monday that it has agreed to sell its interest in Northeast Wind Partners back to First Wind for $223 million.
The deal would end a legal challenge to that partnership, which Houlton Water Co. and a group representing industrial power users argued violated the intent of New England’s deregulation of its electricity market. But that money may be directed at other power generation resources in the region after the completion of the larger deal between First Wind and SunEdison subsidiary TerraForm Power.”
Written by: JAMES HALL – continue at BATR