Masdar’s 10 GW Egypt Deal, Goldwind Buys GE’s Brazil Plant, EQT’s $1.5B OX2 Bid

Masdar signs a land access deal for a 10 GW Egyptian wind project.
Goldwind acquires GE's idle Brazilian wind turbine factory.
Canadian pension fund CDPQ faces hurdles deploying energy
transition capital in Asia. Sweden's EQT moves to acquire renewable
developer OX2 for $1.5 billion. Sign up now for Uptime Tech News,
our weekly email update on all things wind technology. This episode
is sponsored by Weather Guard Lightning Tech. Learn more about
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show? Email us! Pardalote Consulting -
https://www.pardaloteconsulting.comWeather Guard Lightning Tech -
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. Renewable
energy major, Masdar, is joint venture Infinity Power and partner
Hassan Alam Utilities have signed a land access agreement with the
Egyptian government for a massive 10 gigawatt onshore wind project.
The deal provides the consortium with over 3, 000 square kilometers
of land in West Suhag to conduct necessary studies and surveys to
advance the project. When completed, this wind farm is expected to
generate nearly 48, 000. thousand gigawatt hours annually, reducing
Egypt's carbon emissions by 9 percent and helping the country
achieve its 42 percent renewable power target by 2030. It could
also save Egypt an estimated 5 billion per year in natural gas
costs. Phil Masdar, once again, doing amazingly large projects.
Philip Totaro: Yes, and this thing is going to involve a
significant amount of investment. And Mastar's the type of company
that hasn't shied away from sourcing turbines from China, for
instance. So this could end up being a big deal for Envision or
Goldwind. Egypt right now has, I think about 1. 6 gigawatts of wind
operational, pretty much all along the the Suez Canal and the Red
Sea. But this is, taking advantage of an ample amount of space that
still exists out there and reasonably close proximity to to Cairo,
where I think a lot of the power will end up getting piped into.
Fantastic news, again, to see, in general development in Africa.
And we'll see how this evolves in terms of, what they line up as
far as the supply chain players that are going to be a part of
this. Joel Saxum: If I was to recommend anything to anybody from
Mazdar in the development phase or Hasan Alam in these, in, while
they're planning this, Do a really good study on leading edge
protection because you're going to need it. Philip Totaro: Sand and
wind turbine blades don't mix. Allen Hall: Chinese wind turbine
manufacturer Goldwind Technology has completed its acquisition of a
wind turbine factory in Brazil from General Electric. The plan has
been idle since 2022 when GE had left the company. Brazil by
producing turbines at this facility, Goldwyn can meet local content
requirements set by Brazil's largest financing bank, BNDES enabling
wind farm developers to secure long term financing. Goldwyn plans
to begin mass production at the factory by the end of 2024 and aims
to capture 25 to 30 percent share of Brazil's new wind turbine
market in the coming years. Phil, a lot of moving pieces in Brazil
at the moment with a Goldwyn entering and GE and others exiting
Brazil. Philip Totaro: There are. But Brazil's a bit of a
challenging market at this point. Goldwind thankfully at least has
some projects that they've already secured the rights to and
everything where they can deploy the turbines that they would
domestically manufacture. But the Brazilian market is challenged by
competition from hydro and solar, which have been a little bit
cheaper and still seeing specifically for solar, a massive amount
of deployment compared to what wind has been seeing. I was also
recently speaking to somebody from Brazil in regards to the
situation for wind, and he was explaining that. Basically, the
distribution companies there are playing a bit of a game as far as,
companies and individuals who want to be able to source renewable
electricity from the utility company. You don't go direct to the,
the government regulated utility companies. you have to go through
these distribution companies that are, they obviously want to see
the maximum amount of margin and so they want, a high price and a
low cost of generation. Even though you've got wind where there are
PPAs being executed that are, 19 or so 18 a megawatt hour US.
You're still seeing solar and hydropower get favored in, some of
these power distribution networks. The good news is there's a
significant amount of opportunity in Brazil. And The fact that
GoldWind is actually taking over a factory from GE is interesting,
because keep in mind that LM also has a factory in Brazil. And
while they're looking to potentially consolidate, one wonders if
that factory might also be put up for sale. There are certainly
some companies that would be interested in that. But it's
interesting to, have Goldwind formally come into the the Brazilian
market where they've already repowered a couple of projects. But
this looks like this is a long term commitment for them. Allen
Hall: CDPQ, one of Canada's largest pension funds, has announced
difficulties in deploying the 7. 3 billion it had earmarked for
energy transition investments. The fund's Asia Pacific head cited
inadequate long term planning and support from Asian governments as
a key reason for the challenges. The pension fund emphasized that
The need for complete accountability over a 20 to 30 year period
when it comes to energy transition investments, despite many
governments in the region expressing their need for such
investments. So Phil, stability is the key to get renewable energy
projects developed because they take so long to do and the return
on investment happens at the back end on most of these projects. It
sounds like a CDPQ is having a hard time finding places to, to
invest in at the moment. Philip Totaro: And keep in mind as well
that, interest rates in the United States will govern a lot of what
happens in the rest of the world. If we have high interest rates,
then other places are going to have high interest rates and as long
as that, scenario continues to perpetuate, it's Going to make it
harder to deploy capital so I can empathize with their, you, you
read the headline and it's like they're having trouble spending
money. I can think of ways they could, but not necessarily
profitably at this point, it's it is a challenge for investors. I
think that markets will start to soften up within the next six
months. Although the U. S. Federal Reserve still has a lot to say
about interest rates and inflation at this point. And they're
keeping rates high. As long as that's the case companies like CDPQ
are going to find it hard to to find places to, to park money and
turn a reasonable profit. And it's a challenge for the entire
renewables industry. Joel Saxum: CDPQ is a, we want to make sure
that everybody knows what we're talking about here. That is a
Canadian pension fund, so they cannot take risky investments,
right? They want, they need something that's stable, they need
something that's going to guarantee returns, that they're not going
to lose any of their capital on, because that is, it's like the
Canadian Teachers Pension Fund and things like that, so there's a
lot of people that are, this isn't just an investment vehicle like
a BlackRock where they're playing markets and trying to make money,
they're investing people's retirement money basically into these
renewable That's pretty cool. energy developments. So if like this,
in this case, we're talking about some developments in the Asia
Pacific region. If the governments aren't going to get behind it to
stabilize these investments, then they're not going to put that
money out. So they may have to turn to other areas to put this 7. 3
billion to work. Allen Hall: Swedish private equity firm EQTAB has
made a recommended cash offer to acquire Renewable energy developer
OX2AB for approximately 1. 5 billion U. S. dollars. The offer
values OX2 shares at about 5. 60 per share, representing a 43
percent premium over the closing price. Just last week, OX2's
founder and largest shareholder, Pease Industries, has agreed to
accept the offer. EQT believes that OX2 would benefit from
transitioning to a more long term, sustainable business model by
becoming an integrated renewables developer and asset owner. Now,
Phil, does that make sense, that move by EQT? Philip Totaro:
Absolutely, if that integration is what you're trying to
accomplish, because up until now, OX2 always has to find an off
taker. They've got a massive project portfolio that comes along
with this, including I want to say it's almost 5 gigawatts that are
under management it's something like 33 gigawatts that are, in
their project development portfolio. They've got a huge, that's
what's leading to that valuation, first of all, but that's a huge
amount of capacity that they've otherwise got to find a buyer for
in kind of a build, operate, and transfer business model. They're
in a pretty good position by partnering with somebody like EQT
where it makes access to capital easier, access to an offtaker for
the projects easier, which also provides them a bit more
attractiveness and clarity as far as getting a power offtaker on
board as well for that much capacity.