$4B for Rural US Energy, Brookfield Neoen Acquisition

The USDA has announced $4.37 B in funding for the Empowering Rural
America program, Brookfield Asset Management has acquired a 53%
stake in Neoen, and European Energy and Nova Holdings will upgrade
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Welcome to Uptime News Flash. Industry news lightning fast. Your
hosts, Allen Hall, Joel Saxum, and Phil Totaro discuss the latest
deals, mergers, and alliances that will shape the future of wind
power. News Flash is brought to you by IntelStor. For market
intelligence that generates revenue, visit www.intelstor.com. Allen
Hall: Right, first up, the U. S. Department of Agriculture has
announced a 4. 37 billion dollars in funding through their
Empowering Rural America program. This historic investment, the
largest in rural electrification since 1936, will support clean
energy development across seven states. Now the program aims 5, 000
jobs, reduce electricity costs, and cut climate pollution by about
1. 1 million tons annually. 4. 37 billion as the Biden
administration exits the executive branch is a lot of money. Does
this have a chance of, of existing once the new administration
comes in? Phil Totaro: Yeah, I actually think so because this, this
program is done through the Department of Agriculture interestingly
enough, not the Department of Energy, and the reason that they're
doing it is because the co ops are actually, outside of kind of
the, the organized utilities coordinating like corporate power
buying. The co ops are actually one of the biggest You know, in
aggregate power buyers in, in the United States, especially when
you start talking about all the co ops, we're getting kind of
gobbled up by Touchstone and, you know, most co ops in the United
States are now organized under, you know, a parent kind of umbrella
corporation. So this is a lot of money that's going into, you know,
basically subsidizing renewable energy power buying or the
development of distributed power generation facilities. That are
gonna be adjacent to these these rural communities that are able to
take advantage of this this bunny. So, this is one where I really
do hope that they don't try and cut it because this is actually,
like, Putting money in the pockets of people that are doing clean
energy power buying, and it's actually helping get wind and solar
and storage deployed on the grid. So I, this is actually a great
program. Great for the department of agriculture to be doing it.
Not sure why the department of energy wasn't previously on board
with something like this. Joel Saxum: Coming from someone who has
co op power now and grew up with co op power up in Northern
Wisconsin in a rural area, injection of capital into rural
environments anywhere makes me smile. So, because they usually
don't see as much, right? So when a big project comes through or
something gets announced like this, everybody gets a little bit
happy in those areas. And so, weird to see it. Not weird, I
suppose, in a lame duck situation from the federal government, but
yeah, I hope this one continues to, to roll forward in these
projects to get some ink behind them before January 20th. Allen
Hall: In our next story, Brookfield Asset Management has completed
its acquisition of 53 percent stake in French renewable power
producer Neoen SA. The deal valuing Neoen at 6. 1 billion euros
will be followed by a tender offer for the remaining shares at
about 39 euros each. And as part of the regulatory requirement, and
there's always regulatory requirements, Neoen has divested of its
Australian portfolio, including a 652 megawatts of operational
assets and 2. 8 gigawatts of project pipeline Phil obviously
Brookfield. Asset management is a big player in energy in general
and renewable energy. Neoen move in kind of getting out of this
market, being acquired. What is the outcome of this? Where is this
all going? Phil Totaro: Well, it's interesting because besides the,
the divestment of their, you know, assets in Victoria, Australia,
they also own obviously a substantial portfolio in France being a
French company. And Substantial Portfolio in Brazil. Ultimately,
even with the divestment of their Australian portfolio, it gives
Brookfield access to more markets where they didn't necessarily
have a presence before. Like France and Brazil where Brookfield was
kind of, you know, You know, poking around and dipping their toe in
the water a little bit, but they never actually had a substantial
portfolio down there. And France is a market within Europe where
Brookfield also wasn't particularly strong. It's similar to
Germany. It's kind of a highly fragmented market in terms of a ton
of small projects. And so, you know, the, the fact that somebody
like Brookfield can come in take a chunk of portfolio and then get
access to the market, learn how it's all going, and hopefully
anticipate what is expected to be a repowering market in France in
a few years here. You know, if Brookfield wants to have that kind
of presence in Western Europe, this is a, this is a great move for
them to to kind of kickstart that. Joel Saxum: Yeah, Brookfield,
we've seen them make some big investments in some companies you
know, the Deriva one here in the States, which was Duke Energy
they've done some other ones around the world, but the Neoen buy
in, Neoen size, just so you understand, 500 plus million dollars or
million euros in revenue last year. 8. 7 gigawatts in operation or
under construction of renewable energies. They're in 15 countries
and they've got big targets of over 10 gigawatts for 10, for, to be
in the pipeline or operating in 2025. So Brookfield buying into a
big player here looking to maximize their footprint around the
world. Allen Hall: And finally, European Energy and Nova Holdings
have joined forces to upgrade 17 aging German wind farms. The
project will replace outdated turbines installed between 2002 and
2008 with modern, efficient equipment, tripling the current 151. 9
megawatt capacity. Once operational between 2027 and 2030, the
modernized facility will generate 1, 100 gigawatt hours annually,
powering 290, 000 European households. Now, Phil. This is totally
different in Germany, the repowering situation versus the United
States, where in the United States of a repower, they're putting
out the same amount of power onto the grid. In Germany, they're
tripling it. How are they doing that? Phil Totaro: It's basically
taking down turbines that are, you know, kilowatt size or maybe,
you know, up to one, one and a half megawatts and just repowering
it with something that's, you know. Six, seven, maybe close to
eight megawatts. They're, they're building a rather substantial
amount of new transmission in Germany to be able to do this. Keep
in mind that the majority of electricity consumption, particularly
industrial and corporate power offtake, is down in the southern
part of Germany, which is more the industrial region and that zone.
So this partnership between European Energy and Nova Holdings is
great for Germany, and it builds on what they've already done and
demonstrated in Denmark and Sweden Joel Saxum: European Energy got
an investment last year, and they've been working, if you look
through any of the internal news on their investment pages and
portfolios, they've been raising cash, they've been making some,
some funding moves. Over the last few years and they have come from
a smaller, relatively relatively small player to a much larger
player, making a large impact all across the European renewable
energy space. So kudos to European energy for getting in on this
one as well.