E029: Engie Executive Sees The End Of Coal, Gas and Nuclear Power – Interview with Thierry Lepercq

Who: Thierry Lepercq, EVP of Research, Development and Innovation at Engie. Member of the executive committee. Engie is a global energy company with $78billion in revenues and 150,000 employees. What: A discussion about the future of energy regarding the use of traditional power plants, transition to renewables and investing in innovative companies around the world. Impact to You: Engie has sold its US portfolio of coal and gas power plants. It closed a 45 year old coal plant in Australia and sees mobility as a massive impact to the energy system. If they view the future to be without central … Read More →

This is your SolarWakeup for December 14th, 2017

End of Power Plants. In an exclusive interview with SolarWakeup, Engie’s EVP of Innovation sat down with me and told me that coal, gas and nuclear plants are going away - This is a given. Engie is a global company with $78billion in revenue and Thierry Lepercq is a member of the executive committee that drives strategy for the entire business. In some ways, Engie has executed on the vision David Crane had for NRG and sold all of their coal and gas plants in the US. Engie also invested in several efficiency and storage companies. When a company like Engie says that the end of power plants is near, the pieces start to align with the capital and views from the investment community. Our industry should listen and think of how solar plays in that new future. These are big news - so big we even wrote an article about it.

Engie’s Future. In our discussion about the future, the intersection of mobility and energy. I asked him if power companies would get into transportation the same way that transportation companies have gotten into the energy business. We also discuss how the business future of energy storage plays into the power markets and how regulators should align themselves with the right policies. The full interview will be released on solarwakeup.com this week.

Alabama Politics On Energy. Interesting reporting on Senator Doug Jones’s positions on clean air and clean energy. I get that he’s aligned with our industry when it comes to those policies but not a single vote came to him because of that.

Fixing The Tax Bill. News out of DC appear to be aligning with the conversation we had at SolarWakeup Live! DC. The corporate AMT is out and the rate is going up to 21%. BEAT is still in but John Cornyn is on the record saying they want to figure out a way to fix it. The rate is really the biggest impact to the solar industry. Lower rates means less demand for tax credits and less value for depreciation and interest deductions. On the other hand it increases after tax returns which could drive more foreign money into the market. We will see what capital stack looks like at the 21% rate.

Power Of Gas. Normally, companies have to pay big bucks to have their VPs fly to another country and sell their products to a ministerial audience. In the case of the LNG industry, they send over the EPA administrator who should probably have gone to Germany instead of Morocco. Regardless, it’s strange and abnormal for this to happen but I guess nobody is surprised.

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Yann

Engie Executive Sees The End Of Coal, Gas and Nuclear Power Plants

Who: Thierry Lepercq, EVP of Research, Development and Innovation at Engie. Member of the executive committee. Engie is a global energy company with $78billion in revenues and 150,000 employees. What: A discussion about the future of energy regarding the use of traditional power plants, transition to renewables and investing in innovative companies around the world. Impact to You: Engie has sold its US portfolio of coal and gas power plants. It closed a 45 year old coal plant in Australia and sees mobility as a massive impact to the energy system. If they view the future to be without central … Read More →

This is your SolarWakeup for December 13th, 2017

Pruitt Is Lobbying. Of all of the countries that can benefit from natural gas exports from the United States, Pruitt picked the one place that is the Saudi Arabia of solar and wind. Morocco has insane solar and wind resources as one of the few arabic countries without oil reserves. Natural gas is a bridge to nowhere in Morocco and I doubt any power company would invest a dollar in non-solar or wind generation in that Country.

Puerto Rico Report. Interesting how this came about but a group of power folks wrote a 63 page report to the Governors of Puerto Rico and New York on how to rebuild the grid in Puerto Rico post Irma. I interviewed the Congresswoman of Puerto Rico last week and I’ve tried to do business in Puerto Rico. This report is a little more than dressing on the real issue. Everyone knows how to rebuild and it doesn’t cost 18billion. It requires the PREPA balance sheet to be fixed and the private investment will come. Donating solar to a homeowner with a 500 FICO score doesn’t do anything to help that homeowner. PREPA needs to be a creditworthy counterparts, until then nothing sustainable happens. The PREPA advisory council also seems like no more than bureaucracy.

Get Out Of The Way. Governor LePage is annoying and solar folks have had enough. This case is going to the courts and hopefully will get fixed.

Reclaiming Coal. I’ve been involved in a few solar plants on retired coal plants and have been fascinated with the shift it represents. It’s been a tough market to focus on because the ground is tough to connect to but with floatovoltaics, flooded coal mines could present a great second life.

Attack Is Coming. I had not seen Tom Pyle’s name quoted since his involvement with the EPA transition. He’s been actively trolling folks on Twitter and now an oped on The Hill website. This is in relation to tax reform and I stay on the record stating that solar and wind would gladly compete without tax credits if all other energy credits also disappear - I say this with apologies to my tax equity friends. Have no fear because other segments would never let go of their tax benefits and they don’t want to have this argument and are glad to see solar and wind retain their tax credits.

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Yann

This is your SolarWakeup for December 12th, 2017

Short update this morning as my California jet lag and upcoming interviews are messing with me. Make sure to catch up on previous podcasts and my tax reform conversation, there are a bunch of conversations that will drop over the next week that will give you something to listen to and learn from over the holidays.

Going Private. Canadian Solar got an offer from its CEO. Part of the strategy may be to get off the New York market and go public in the Chinese stock exchange instead. This isn’t the first company to go this route.

Deploying Capital. Big numbers coming from EDF on deploying capital to solar projects. The headline is nice but let’s be real, there is unlimited amount of money available for solar projects at the yields that projects currently go to market. However, it is always nice to see these types of announcements.

Business Interest Allocation. Pay particular attention to the comment in the tax reform video of about a business interest change in the tax reform bill. Catch it towards the of the video.

Solar In Florida. There are some unhappy executives in Florida this week. Between the article yesterday on the nuclear cost recovery clauses and this natural gas boondoggle in Florida, public opinion on monopolies will test the single digit approval marks. Let’s see how politicians react.

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Yann

This is your SolarWakeup for December 11th, 2017

I am on my way to San Francisco for a few great interviews. Always good to travel into the center of the solar industry universe.

Tax Reform Explained. The tax reform bill is in conference committee and no one really knows what will come out of this step. Whatever has been voted on can get completely rewritten and come out looking different. But the core pieces will get put into the final version that goes to both houses to vote on. Last week, at SolarWakeup Live! DC, I sat down with tax lawyer, Greg Jenner, and project finance lawyer, Audrey Louison, to go through the main provisions. The entire interview is available in podcast or video format. If this interview feels different than what you typically get at a solar conference it’s because I come at it from your side of the table. I have to make the same business decisions based on political and regulatory issues that you do and know what information I need to make that decision. My interviews come from a different perspective to drive information to you, not to fluff up the news. Hope you enjoy it.

BEAT Provision. In the interview you’ll find my discussion with Greg Jenner about the BEAT provision and he explains why BEAT, or some version of it, needs to be in the bill. Think of it as a way to stop companies from parking cash abroad. The House version uses a more piecemeal approach but in my conversation with multiple sources of tax equity, they seem to be unaffected thus far. That being said, the rules aren’t final and as Greg said, they have to do some form of BEAT. Don’t expect it to go away.

Corporate AMT. It was thrown back into the Senate version at the last minute. It’s causing a stir with donors/lobbyists and it’s going to be taken out and ‘fixed’.

Rates. Probably the most overlooked part of the bill and the most obvious is the impact of lower rates on the tax equity market. First, less tax liability means less tax equity supply. Second, lower rates means that depreciation is worth less and your projects will have to be repriced with the new rates in mind. All of these issues could cause contractual problems which we also discuss in the interview under the ‘change in law’ provisions of your agreements.

Will It Pass. Yes, says Greg Jenner. I tend to agree that it has to pass because as more political folks have called it, the ‘donor relief act of 2017’ is a political must have for the GOP. Let’s see where it goes from here, because in DC nothing is ever certain (except that SolarWakeup Live! DC will always get you the info you want to hear).

Don’t Miss. A great highlight of the power the utilities have pushed at the State legislature level across the South, harmful to consumers and hopefully the end of the monopoly system. A single city aims to be all EV mass transit in China. McIntyre takes over as chairman and promptly delays the NOPR decision by 30 days. As Phoenix files for insolvency, I want to talk about the downstream pains in solar in more detail this week.

SolarWakeup Live! New York. Tickets going on sale shortly but book your day to join us in New York on January 31^st. The first 50 tickets will be 50% off, so get them quickly. If you are interested in sponsoring, hit reply to this email and I will get you more info.

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Yann

SolarWakeup Live! Video: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin

In this episode of SolarWakeup Live! I talk about the current Tax Reform Bill with Audrey Louison from Mintz and Greg Jenner from Stoel Rives. The tax reform bill was in conference committee at the time of this recording and had several issues that impacted the solar industry. The corporate AMT, a lower corporate tax rate and the BEAT provision. I walk through each of the items with Audrey and Greg, get an explanation (because nobody understood the BEAT provision) and how it impacts solar project financing going forward. Greg has been around tax law for many years, including as a … Read More →

This is your SolarWakeup for December 8th, 2017

Tax Reform Explained. A quick turnaround for this important issue, a podcast on the tax reform bill. On December 6^th, I was joined on stage at SolarWakeup Live! DC by Greg Jenner, a tax lawyer at Stoel Rives, and Audrey Louison, a project finance attorney at Mintz Levin. Greg did a great job of explaining the various issues, from the corporate AMT, tax rates, BEAT and business income allocations while Audrey translated the potential effects on the partnership contracts. As someone that has had to live inside these agreements, I tried to get the information you need to think about as you raise capital for your projects – this was not a typical fluffy interview. Thanks to Audrey and Greg for bringing their knowledge to the SolarWakeup family.

The Goose Rule. Duke Energy is making a big deal as they acquire the remaining shares of REC Solar. Part of their commentary is how they plan on servicing the C&I segment. The irony is thick here as Duke brings a PPA case in North Carolina to the supreme court to stop a church from being able to buy solar energy while benefitting from the same policy in areas outside of its service territory. The rules of the monopoly should require consistent regulatory positions from the utilities. The deregulated side of the house benefits from the cost of capital provided by ratepayers but does not have to live within the same rules and that needs to change. I would like to see a regulatory body require the deregulated side of a monopoly to live by the same rules.

US Manufacturing. As the USTR held a hearing on the 201 issue to decide on tariffs, First Solar was updating its investors on the impressive Series 6 module. While First Solar has a factory in Ohio, it is also exempt from the 201 case which only pertains to crystalline technology. As First Solar has come out in support of tariffs, it is also adding another 1.2GW factory…in Vietnam. Great for America, I guess, as an American company innovates and develops in the US while manufacturing around the world.

GE Power. GE is active in renewable energy on the hardware and finance sides of the market. They are well aware that traditional power is changing and new energy sources like wind, solar, energy storage and efficiency are replacing the load and generation. Now the impact is felt widely by the power unit with layoffs which is unfortunate given the many attempts by GE to lead in the solar space.

Energy Lobbying. Name 4 companies that lobbied hard for tax reform and I wouldn’t have listed NextEra as one of them but Vox has reporting stating it was. I’d like to hear what solar lobbyists would say about that.

Sponsored by Mintz Levin. Mintz Levin is an Am Law 100 law firm with a nationally recognized Energy & Sustainability Practice that has completed more than 500 transactions across energy sectors totaling over $7.5 billion since 2006.

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Yann

E028: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin

In this episode of EnergyWakeup I talk about the current Tax Reform Bill with Audrey Louison from Mintz and Greg Jenner from Stoel Rives. The tax reform bill was in conference committee at the time of this recording and had several issues that impacted the solar industry. The corporate AMT, a lower corporate tax rate and the BEAT provision. I walk through each of the items with Audrey and Greg, get an explanation (because nobody understood the BEAT provision) and how it impacts solar project financing going forward. Greg has been around tax law for many years, including as a … Read More →

This is your SolarWakeup for December 7th, 2017

USTR Hearing. There is great video online of the rally organized by SEIA in front of the trade hearing that only allowed about 100 folks into the room, mostly those testifying and their attorneys. Folks inside the room said the officials asked good questions and seemed more in tune with the issue, in some instances trying to understand the nuances of the impacts that a tariff could create. Many predictions about the possible next steps but nothing will be certain until the President makes up his mind.

South Carolina. The PAC, Solar Powers America, is focused on South Carolina and its Governor. In particular, around the 201 trade issue, no State is more directly impacted by tariffs than South Carolina. In October, the Governor of South Carolina directly intervened with the President as covered by the article highlighted below. There are no boundaries around political parties and this is a great exhibit of that.

GOP Members. 6 US Senators, all republicans, sent a letter to the trade representative urging the board to stop further tariffs from being enacted. Notable are the two US Senators from South Carolina, continuing the theme of good lobbying having a proportional result. Also a new radio ad from Sean Hannity on this issue, ignore the Obama bashing (it’s the price of admission).

DC Live. Thank you to everyone that showed up at SolarWakeup Live! DC and our happy hour afterwards. I hope you enjoyed the drinks and the good time with your solar colleagues. The discussions were great and our speakers brought news to the audience, including timely conversations about tax reform. Stay tuned for those conversations to be released in the very near future.

Presented by MMA Energy Capital. At MMA Energy Capital, we partner with developers, EPC contractors, and system owners to provide project capital necessary to develop, build, and operate world-class renewable energy systems. We are currently hiring at our growing company.

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Have a great day!
Yann