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Engie and Hannon Armstrong Form Multi-Gigawatt US Renewables Partnership

The North American arm of European energy giant Engie SA and climate-focused investor Hannon Armstrong announced Thursday they will partner on a 2.3-gigawatt portfolio of U.S. wind and solar projects slated for completion this year.

The two will split equity ownership of the Engie-developed portfolio, with that company maintaining a 51 percent majority interest and continuing to manage the projects. The portfolio includes wind installations in South Dakota, Kansas, Oklahoma and Texas as well as solar projects in Texas — where Engie’s North American subsidiary is based — and Virginia. Offtakers include big-name brands such as Target, Microsoft and Walmart, plus just one investor-owned utility: Minnesota-based Xcel Energy, which is working toward achieving 100 percent carbon-free electricity by 2050.  

In April, Engie announced it had secured $1.6 billion in tax equity financing from Bank of America and HSBC for its 2-gigawatt portfolio still under construction in the U.S.

By the end of 2020, formerly fossil-focused Engie plans to have developed and constructed 2.3 gigawatts of renewables operating in the U.S., where in 2018 it had none.

“We’ve been through a big transformation over the past years, in order to refocus our activity on renewables,” Gwenaelle Avice-Huet, CEO at Engie North America, told Greentech Media.

That transformation includes the acquisition of distributed solar developer SoCore Energy and large-scale wind builder Infinity Renewables. The new partnership between Hannon and Engie bolsters Engie’s promises to seek more renewables in the U.S., but it’s not the first time Hannon has put its climate-focused dollars behind the European power company. Earlier this year Hannon, along with French investor Meridiam, provided investment in a public-private partnership for Engie’s 50-year takeover of the University of Iowa’s on-campus energy and water utility systems. Engie plans to transition the school to zero-carbon energy and cut out coal use by 2025. In 2018, Hannon provided a $50 equity investment in an Engie portfolio of distributed corporate and industrial solar projects. 

Avice-Huet cited the U.S. has a “key country” for Engie’s future growth as it steers away from fossil fuels and towards renewables.

Hannon Armstrong CEO Jeff Eckel told Greentech Media the investment will help the publicly-owned Hannon diversify and scale its own investment portfolio, which has skewed towards solar in the last several years. Behind-the-meter projects in energy efficiency, storage and distributed solar currently make up the majority of its $2.1 billion portfolio, with grid-connected solar and wind also accounting for a significant portion of its investments.    

A focus on corporate customers

Most of the power the Engie-Hannon portfolio produces will be sold to companies looking to increase their renewable electricity, such as T-Mobile and Amazon.

That focus…

Read More: Engie and Hannon Armstrong Form Multi-Gigawatt US Renewables Partnership

2020-07-02 13:15:30

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