BP Sells US Onshore Business, GE Vernova Italian Partnership

BP has decided to sell its onshore wind business in the US,
aligning with the company's return focusing on oil and gas. GE
Vernova has partnered with Italian company Lizard Renewables to
develop over a gigawatt of renewable power in Italy. Engie has
added Ares Management as a partner in a 2.7 gigawatt portfolio in
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NF92324 Allen Hall: I'm Allen Hall, president of Weather Guard
Lightning Tech, and I'm here with the founder and CEO of IntelStor,
Phil Totaro, and the chief commercial officer of Weather Guard
Lightning Tech, Joel Saxum. And this is your News Flash. Newsflash
is brought to you by our friends at IntelStor. If you want market
intelligence that generates revenue, then book a demonstration of
IntelStor at IntelStor. com French power utility Engie has
partnered with Ares management in a significant us renewable energy
deal. Engie North America has attracted Ares management
infrastructure opportunities fund as a minority partner in a 2. 7
gigawatt portfolio. of operational solar, wind, and co located
storage assets across the U. S. This transaction, NJ's largest
operating portfolio sell down in the U. S., involves 15 plants
across ERCOT, MESO, PJM, and SPP. Okay, Phil, a lot of acquisitions
and mergers happening again, this time with Engie. Philip Totaro:
Yeah, this one is Interesting a little bit because it's More or
less their first foray besides what they've done in offshore. It's
one of their first kind of forays into significant minority
ownership from a financially focused partner And, Ares obviously
has an appetite. Ares owns a few other assets in the U. S., either
majority or significant minority as well. And so to add this kind
of a portfolio to the mix gives both companies, It helps both
companies achieve what they want in terms of, freeing up some
additional capital for Engie to go reinvest in other projects and,
bringing on a partner that wants financially viable assets in
their, in their portfolio mix. So, look, we've talked about a
number of these kinds of deals in the past where, a financially
focused company gets into a portfolio, either minority, majority
but partners in some way, shape, or form with an experienced owner
and operator and it's, it's good to see this, this matchup. And I
would expect if there's anyone else out there that hasn't already,
executed deals like this, they are probably looking to go in this
direction because there is a lot of capital that it's sitting on
the sidelines right now. You're, you're not seeing tons and tons of
new capital go into new project build out because of interest rates
and et cetera. But there is capital kind of sitting on the
sidelines that wants to be able to get into renewables. This is
still one way they can do that by partnering on a pre existing
portfolio. Joel Saxum: And from an operational standpoint, Ares
just, I think, a few years ago acquired the majority stake in Apex
Clean Energy. And when that happened, I know the Apex Teams ended
up operating their assets more themselves. So, and where they were
traditionally kind of like letting other ISPs or whatever, or, or
FSAs manage them, they turned into a different financial model. So
you can look for some of these assets that Engie manages right now
with the Ares funds and to possibly adjust how they manage these
things. from a operational standpoint as well. But like Phil said,
a lot of, a lot of moving parts here, and this is a way to put
capital to work. Allen Hall: BP has announced plans to sell its U.
S. onshore wind energy business. The company will soon launch the
sale process for BP Wind Energy, which has interest in 10 operating
onshore wind assets across seven U. S. states, with a total net
generating capacity of 1. 3 gigawatts. BP executive William Lin
stated that the business is likely to be of greater value for
another owner. Bill, a lot of oil and gas based businesses that
have been in renewables for several years are pushing back into oil
and gas because of interest rates. But there's also something more
at play about scale I think here with BP. There is a big push to be
big in wind or to be big in solar and BP doesn't want to take that
step at the moment. Philip Totaro: Yeah, well, I mean, Allen, not
for nothing, it's been 15 years of them not really wanting to take
that step, to be perfectly blunt about it and, and it's unfortunate
because they could have, poured a lot of money in. But they also
had a bit of a sour taste in their mouth because when, even 15
years ago, when they did start investing in some of these wind
farms, they probably thought they were going to be a easier to
operate and own and be more profitable to operate and own than what
they ended up being. Now, that said, a lot of this 1. 3 gigawatts
of portfolio that they're selling or offering for sale is likely to
be repowered if there's a couple of projects that have already been
recently, but we'll This is largely a repower play for somebody
that wants to get in on something that's probably, at least 10
years old. I'd say the vast majority of this portfolio is, 10 years
old or older. So you can qualify for a PTC repowering on this. It's
sad from the perspective of, oil and gas companies just saying, you
know what, we tried renewables, it wasn't profitable enough, so
we're dumping out of it for the most part, and maybe we'll come
back in later when it looks like it's more profitable again. Which
is an easy thing to do when you've got piles and piles of cash like
they do. And, right now it's more profitable to just do oil and gas
than it is So when we see oil and gas prices go down and, profits
from renewables go back up, you'll see these guys come back, but
it's a good way to, to, um, recycle, so to speak some some assets
and, and allow someone else to, to take over and, and repower them
while they redeploy capital elsewhere. Joel Saxum: Yeah, this is a,
like we've talked about, this is a trend, these major oil and gas
companies. What, what drives it? Returns for stakeholders, returns
for shareholders, the Wall Street stuff. When BP's changed over
CEOs in the last, in the last year, the message was clear, we're
going to do what we can to drive profits for our stakeholders and
in oil and gas, there's just higher margins than there is in, in
the wind industry or renewables industry. However, of course, as a
renewables industry, we want to see the transition move forward.
So. Hoping that when things move a little bit further along here,
you see some of that capital redeployed and do the renewable energy
generation sector. But for right now BP putting their own money
elsewhere. Allen Hall: Lastly, GE Vernova has formed a joint
venture with Italian renewables company, Lazard Renewables to
develop over one gigawatts of wind, solar, and battery. Energy
storage projects in Italy, the 50 50 joint venture named Alva
Power, will initially work on bringing this portfolio to the ready
to build stage, with Lazard having already selected and prepared
the projects. The partnership aims to contribute to Italy's
renewable energy targets of 30 percent renewables in total energy
consumption and 55 percent renewables in electricity generation. By
2030 bill, Italy has become a kind of a renewables battleground
between Chinese manufacturers and now G. E. Vernova is this makes
sense to, to partner with a large player like Lazard, where you're
highly integrated into the Italian grid. Philip Totaro: It does for
GE and this deal is actually particularly kind of interesting to me
because anything that is a GE turbine that's already been
previously deployed in Italy is either a 1. 5 megawatt or the, the
2. 5 120 platform. That was, that was pretty popular, but even a
lot of those are getting to be, those assets are getting to be at
least 10 years old or older. He, GE hasn't been particularly
successful in selling a lot of their existing product portfolio
into the Italian market. So a development partnership. Seems like
the way to go in Strategic markets like this where yes, there's
been some kind of competition you could say from from companies
like gold wind onshore although it's it gets blown out of
proportion a little bit, but The reality for ge is that they need a
partnership like this to be able to continue selling, newer models
in, in a market like Italy, which, is an important, they've got 9,
000 turbines over there, and a lot of them are going to need to be
repowered as well in, in the coming, five years, you're going to
have an opportunity to take advantage of by establishing this kind
of this kind of a JV. Joel Saxum: So as well to the listeners, this
isn't the first of its kind of a JV or a. OEM being or having a
development arm, but the ones that like a Vestas has had it in the
past as well. But what the goal of most of these are is to build
out a pipeline and go through the permitting processes, go through
all of the, the government rigamarole and into getting the
transmission connection stuff, but not actually. Putting assets in
the ground. Once they get to that stage, sometimes they they'll
bring in another group to actually do construction and then
operations, maintenance, and that, those kinds of things. But what
it is, is it's them getting everything ready to go with a earmark
for their turbines to go into that project.