Suzlon Acquires Renom, Algonquin Sells Non-Hydro Assets

Suzlon Energy will acquire a 76% stake in Renom Energy Services for
$79 million. Algonquin Power & Utilities Corp has announced the
sale of its non-hydro renewables business to LS Power. Haizea Wind
Group has secured a €35 million green loan from the European
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www.weatherguardwind.comIntelstor - https://www.intelstor.com 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, Joel Saxum. And
this is your News Flash. News Flash 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. Suzlon Energy will acquire a 76 percent stake in
Renom Energy Services. For 660 crore rupees or approximately 79
million U. S. dollars. This move is set to strengthen Suzlan's
position in the operations and maintenance sector. Renan Energy
Services is currently the largest multi brand operations and
maintenance service provider in India, managing assets totaling 1.
7 gigawatts in wind, 148 megawatts in solar and 572 megawatts in
BOP. Phil, with the advent of G. E. Vernova and Siemens Gamesa
leaving India slowly and leaving the maintenance up to other
organizations, Is this a good move by Suzlon to try to fill that
void? Philip Totaro: It is. It's a very interesting move as well
because of how fragmented the Indian market is, just in general,
both on the OEM side and on the maintenance side. So, as you
mentioned, there's a couple of Western OEMs that are kind of
pulling up stakes, and frankly, Vestas hasn't been getting the same
level of sales in the past that they have in India either. With the
growth of Inox Wind. And the introduction of Adani's turbine as
well. So for, for Suzlon, this is an interesting move because, as
you mentioned, it gives them access to a maintenance provider that
is not only kind of the biggest ISP in the market, but they also
have a multi brand portfolio that they are servicing, giving them
access to a wide array of of different technologies. As I
mentioned, it's a fragmented market. And so the reason why there
isn't. A big dominant player in operations and maintenance in the
market is because you have some OEMs that are still kind of
contractually obligated on certain projects, but they've pulled up
stakes. Other OEMs that used to operate in the market don't
anymore. And so you've got a particularly big market opportunity
for. Susan and read on to step into here. The Indian market is now,
I think, 46 gigawatts of onshore wind installed and another, I want
to say, 80 something gigawatts of solar at this point. So, it's a
it's there's a lot more opportunity for growth in this segment.
Joel Saxum: Yeah, Allen and I actually were on a call this morning
with some people from India that are a large developer over there
and it seems like every time we're on a call with anybody from
India, they are a large developer or they have a large pipeline.
One of these, one of these pipelines was two gigawatts in the next
few years. Another one we talked to a couple weeks ago was four
gigawatts in the next four years. So there's a lot of big plans for
wind in India and Suzalon right now through this move is looking to
capitalize on that. On ensuring or being in the position to ensure
the wind energy sector in India remains strong, right? They're the
largest wind energy OEM in India right now. Suzan, when you hear
Suzan, India, right? So they're, they, they had put on some bids
when Siemens was pulling out, and they're grabbing some other
O& M activities. They're building new wind farms. So, Suzlon
looking to be a power player over there and they'll, they'll spread
their wings in that sector as well. Allen Hall: Moving over to
Europe, Spanish wind turbine component manufacturer Hesia Wind
Group has secured a 35 million euro green loan from the European
Investment Bank. This funding will be used to implement advanced
manufacturing technologies, automate and digitalize processes and
advance R& D applied to large metal structures for wind
turbines. This includes towers, monopile, foundations, and offshore
wind farm transition pieces. Now, Phil, with some recent elections
over in Europe, there is a renewed effort to support local
industries within the EU. Will we see more of this over the next
year or so? Philip Totaro: I think so, yes, because there's been
obviously a push from the European manufacturers to say, Look,
support us, or we're pulling up stakes and moving our manufacturing
operations over to India or China. And I guess who can blame them
with a lower overhead cost and ample support that they would get
being in those markets, employing local resources and receiving
local tax breaks there. There are even companies in Europe. They're
looking at the United States particularly with renewable energy
manufacturing in mind. So this is kind of first steps at. A wider
package. There's been other money that's recently been allocated as
well that the European Commission or the European Investment Bank
or other entities in Europe have committed to companies that are
going to also commit themselves to domestic manufacturing. So, I
think it's it might be a small amount at 35 million, but it is
something that's important for HESIA because they actually have I
want to say something like above 50, probably around 55 percent
market share for transition pieces in, in Europe, particularly for
European offshore projects. So. They're a, they're a big player and
they will benefit from having this this level of support. You can
expect it to hopefully propagate to other companies here and in the
near future. Joel Saxum: Let's take 30 seconds to dive into this
thing a little bit on a technical level. So Alvaro Quintana, the,
the wind group finance director says this loan supports their goal
of helping clients work towards a more sustainable economy. That's
pretty cool. That's word speak that everybody in the wind industry
is going to use or anybody in the renewable energy. It doesn't
really mean that much. But when you dig into it, what they're going
to use these funds for is manufacturing technologies to automate
digitalized processes, right? That is something that the wind
industry needs to become. More cost effective to become more
competitive on a global basis. So if you can, if you can take this
money and you can put it into automating, making better products
faster, more efficiently with a higher quality, that's what the
wind industry needs. They're talking about steel here because
that's what Haysia does. And that's great. So we're going to get
some, hopefully get some more research and development into
automating some of these processes. The next thing I want to see
one of these loans go for is. Freaking blades. That's just my take.
Allen Hall: In a significant move in the renewable energy sector,
Canada's Algonquin Power and Utilities Corp. has announced the sale
of its non hydro renewables business to LS Power, a U. S. based
power and infrastructure company. The deal, valued at up to 2. 5
billion U. S. dollars, marks a strategic shift for Algonquin
towards becoming a pure play regulated utility. Under the terms of
the agreement, LS Power will pay 2. 28 billion dollars in cash at
closing With an additional potential earn out of up to 220 million
dollars based on the performance of certain wind assets. Algonquin
expects to receive approximately 1. 6 billion dollars in net
proceeds after accounting for debt repayment, taxes, Phil, this is
a huge deal, and we've seen a number of large operators get out of
the non regulated business. What is the push to do that? Philip
Totaro: Yeah, this, this is fascinating because, as you mentioned,
Algonquin was really spending a lot of time with, between Algonquin
Power and Utilities and their subsidiary companies like Liberty for
those that are familiar. Yeah. They were spending a lot of time
building up this portfolio with the rather, sizable chunk of, of
wind and solar. And they actually have a very, healthy portfolio
of, of projects. In fact earlier this year, we identified at
IntelStor the fact that Algonquin has the number one performing
portfolio of wind projects in the United States right now. Based on
comparison of their actual energy output versus. Their predicted
output so it's no surprise to me that they were able to sell for, a
price premium going back to the question of why are they doing this
and pulling out and, and just focusing on the regulated utilities
market. It's because of profit margins. They would rather take some
of the cash that they have and redeploy it towards the regulated
utility business segment. And as a result of that, they are going
to, kind of Forgo the potential growth in, expansion of that, of
that portfolio in favor of allowing LS power to to kind of
capitalize and consolidate what they're trying to build. So I think
the reason that a lot of these utility companies or utility focused
companies that also had a renewable development portfolio have
pulled back and said, we're going to focus on the regulated market.
Is because the fact that it's a regulated market, it provides them
more certainty, plus the additional cash that they now have from
the sale of this kind of a renewable portfolio. We've again, as you
mentioned,