The mid-February winter storm in Texas has dramatically underscored the importance of reliable power generation. Record low temperatures, historic snowfall, and icy roads throughout the state led to disruptions in food and vaccine distribution, left millions without power or clean water, and resulted in the loss of dozens of lives.
\n\n\n\nSome have found it politically expedient to place the blame on wind power. Yet in reality, wind energy only constitutes a fraction of Texas\u2019s power generation, and it typically functions effectively in very cold weather.
\n\n\n\n
When appropriately winterized, wind power works very effectively in colder climates
While Greenbacker\u2019s fleet of sustainable energy projects doesn\u2019t currently extend to the Lone Star State, our company has extensive experience with renewable assets in cold climates. We own and operate wind farms in Minnesota (31 MW), Montana (25 MW), and Vermont (10 MW), and we\u2019ve found them to work very effectively in the colder temperatures these states regularly face.
\n\n\n\nWhile turbines do occasionally ice over, that doesn\u2019t happen just because the weather gets cold. In fact, when planned for ahead of time, colder temperatures are actually better for wind (and solar) power generation than hotter ones; cold temperatures increase electrical conductivity, whereas hot temperatures increase electrical resistance.
\n\n\n\nThere\u2019s only a small window of concurrent weather conditions in which turbine freezing is possible. Temperatures have to be within a few degrees of freezing, and relative humidity must be high enough to cause moisture to form ice on the turbine blades. Once conditions move outside of this window, freezing is no longer a possibility. In Texas, wind turbines weren\u2019t prevented from turning because of extreme cold\u2014rather, it was the disastrous combination of the very specific weather parameters outlined above that caused them to stop spinning.
\n\n\n\n
Greenbacker\u2019s risk-averse strategy favors long-term power purchase agreements
From a portfolio standpoint, small amounts of downtime due to turbine icing are normal, as are periods of excessive cold, even for wind sites in typically warmer climates. Yet these slight interruptions don\u2019t hamper returns for our investors. Our financial and production models account for a certain amount of decreased power generation due to weather (e.g., blade icing) and curtailment, so they won\u2019t result in the loss of predicted revenue\u2014or cause long-term damage to our equipment. Nonetheless, such disruptions highlight the inherent benefits of diversification.
\n\n\n\nHowever, in keeping with our risk-averse business model and goal of delivering consistent performance for our investors, we don\u2019t have projects in Texas. Most new-build wind and solar projects in Texas secure short-term hedges, rather than the longer-term power purchase agreements (PPAs) that Greenbacker favors. These hedges are typically paired with credit-worthy financial institutions and range between five to ten years, while the remaining project value relies heavily on uncontracted merchant revenue. Although hedges put a price floor in place, the project can still end up paying the hedge provider for a certain amount of production and pricing above the strike price (i.e., the project will owe more to the hedge provider if energy prices skyrocket, and the project is not able to produce electricity).
\n\n\n\nTexas\u2019s energy crisis highlights how even during a renewable project\u2019s brief contracted period, many factors can significantly alter a short-term hedge:
\n\n\n\nThese factors can completely change a project\u2019s overall economics. While renewable energy funds with greater risk appetite continue building financially hedged projects in Texas, Greenbacker has been focused on more traditional opportunities available with risk-adjusted returns better suited for our investors.
\n\n\n\nGreenbacker\u2019s investment thesis is generally based on long-term contracted cashflow. Because we prefer lower-risk projects and long-term PPAs, the options for us in Texas are limited. Instead, we\u2019ve been able to find more profitable and stable projects (with PPAs ranging from 15 to 25 years) in many other areas of the country.
\n\n\n\n
Renewable energy solutions can offer greater reliability
Texas\u2019s electricity usage has been gradually transitioning toward wind power, with the state generating more wind-powered electricity than any other.1 As policymakers search for ways to prevent a repeat of this winter\u2019s energy crisis in Texas, the shift to more reliable (and cleaner) energy sources may accelerate. Additionally, as consumers seek more consistent electric service and less volatile power bills, more residential renewable solutions and home battery systems could be in the future as well. And we\u2019re happy to lead the way.
\n\n\n\nGreenbacker owns and operates a portfolio of income-producing renewable energy assets, diversified across size, power source (e.g., solar, wind, and energy storage), and geography. Our fleet encompasses 235 projects across 29 states, and its operations are overseen by our experienced technical asset management team. Our investment team ensures that Greenbacker\u2019s assets adhere to specific risk-reduction criteria, as we seek to bring renewable energy investment opportunities to market and deliver reliable returns for our investors.
\n\n\n\nDisclosure
\n\n\n\nThis information has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, or to participate in any trading or investment strategy. This is a private offering made only pursuant to exemptions provided by Section 4(a)(2) of the Securities Act, Rule 506(b) of Regulation D and applicable state securities laws and solicitation is limited to clients with substantive pre-existing relationships. If any offer of securities is made, it will be pursuant to a definitive offering memorandum prepared by Greenbacker Capital Management LLC (\u201cGreenbacker\u201d) that contains material information not contained herein and which supersedes this information in its entirety. Any decision to invest in the strategy described herein should be made after reviewing a confidential private placement memorandum (\u201cPPM\u201d), conducting investigations and consulting the investor\u2019s own investment, legal, accounting, and tax advisors in order to make an independent determination of the suitability and consequences of an investment. Greenbacker does not provide tax advice. Investors are urged to consult with their own tax advisors regarding an investment in the strategy described herein and the realization of any tax benefits. The information presented herein may involve Greenbacker\u2019s views, estimates, assumptions, facts, and information from other sources that are believed to be accurate and reliable and are, as of the date this information is presented, subject to change without notice. There are material risks associated with investing in alternative Investments including financing risks, general economic risks, long hold periods, and potential loss of the entire investment principal. Potential cash flow, returns and appreciation are not guaranteed Please read the PPM in its entirety, paying careful attention to the risk section prior to investing.
\n\n\n\nGreenbacker Renewable Energy Company LLC is a publicly reporting, non-traded, limited liability company that acquires and manages income-generating renewable energy projects and other energy-related businesses.
\n\n\n\nGreenbacker Capital Management LLC. 11 E. 44th St., Suite 1200, New York, NY 10017
\n\n\n\n1 US Energy Information Administration, State Profile and Energy Estimates, March 19, 2020, https://www.eia.gov/state/analysis.php?sid=TX#5.
\nThe post Wind power, freezing weather, and the renewable energy landscape in Texas appeared first on Greenbacker Capital.
\n", "content_text": "The mid-February winter storm in Texas has dramatically underscored the importance of reliable power generation. Record low temperatures, historic snowfall, and icy roads throughout the state led to disruptions in food and vaccine distribution, left millions without power or clean water, and resulted in the loss of dozens of lives.\n\n\n\nSome have found it politically expedient to place the blame on wind power. Yet in reality, wind energy only constitutes a fraction of Texas\u2019s power generation, and it typically functions effectively in very cold weather.\n\n\n\nWhen appropriately winterized, wind power works very effectively in colder climates\n\n\n\nWhile Greenbacker\u2019s fleet of sustainable energy projects doesn\u2019t currently extend to the Lone Star State, our company has extensive experience with renewable assets in cold climates. We own and operate wind farms in Minnesota (31 MW), Montana (25 MW), and Vermont (10 MW), and we\u2019ve found them to work very effectively in the colder temperatures these states regularly face.\n\n\n\nWhile turbines do occasionally ice over, that doesn\u2019t happen just because the weather gets cold. In fact, when planned for ahead of time, colder temperatures are actually better for wind (and solar) power generation than hotter ones; cold temperatures increase electrical conductivity, whereas hot temperatures increase electrical resistance.\n\n\n\nThere\u2019s only a small window of concurrent weather conditions in which turbine freezing is possible. Temperatures have to be within a few degrees of freezing, and relative humidity must be high enough to cause moisture to form ice on the turbine blades. Once conditions move outside of this window, freezing is no longer a possibility. In Texas, wind turbines weren\u2019t prevented from turning because of extreme cold\u2014rather, it was the disastrous combination of the very specific weather parameters outlined above that caused them to stop spinning.\n\n\n\nGreenbacker\u2019s risk-averse strategy favors long-term power purchase agreements\n\n\n\nFrom a portfolio standpoint, small amounts of downtime due to turbine icing are normal, as are periods of excessive cold, even for wind sites in typically warmer climates. Yet these slight interruptions don\u2019t hamper returns for our investors. Our financial and production models account for a certain amount of decreased power generation due to weather (e.g., blade icing) and curtailment, so they won\u2019t result in the loss of predicted revenue\u2014or cause long-term damage to our equipment. Nonetheless, such disruptions highlight the inherent benefits of diversification.\n\n\n\nHowever, in keeping with our risk-averse business model and goal of delivering consistent performance for our investors, we don\u2019t have projects in Texas. Most new-build wind and solar projects in Texas secure short-term hedges, rather than the longer-term power purchase agreements (PPAs) that Greenbacker favors. These hedges are typically paired with credit-worthy financial institutions and range between five to ten years, while the remaining project value relies heavily on uncontracted merchant revenue. Although hedges put a price floor in place, the project can still end up paying the hedge provider for a certain amount of production and pricing above the strike price (i.e., the project will owe more to the hedge provider if energy prices skyrocket, and the project is not able to produce electricity).\n\n\n\nTexas\u2019s energy crisis highlights how even during a renewable project\u2019s brief contracted period, many factors can significantly alter a short-term hedge:\n\n\n\nSpot pricing volatility \u2013 Unexpected, extreme energy price fluctuations; some Texans are reportedly paying hundreds of dollars a day during the crisis for power on the state\u2019s wholesale market.Basis \u2013 The difference in price between the project location and potential hedge location which could follow an average or index.Curtailment \u2013 A deliberate reduction in energy output in order to balance energy supply and demand or due to transmission constraints.\n\n\n\nThese factors can completely change a project\u2019s overall economics. While renewable energy funds with greater risk appetite continue building financially hedged projects in Texas, Greenbacker has been focused on more traditional opportunities available with risk-adjusted returns better suited for our investors.\n\n\n\nGreenbacker\u2019s investment thesis is generally based on long-term contracted cashflow. Because we prefer lower-risk projects and long-term PPAs, the options for us in Texas are limited. Instead, we\u2019ve been able to find more profitable and stable projects (with PPAs ranging from 15 to 25 years) in many other areas of the country.\n\n\n\nRenewable energy solutions can offer greater reliability\n\n\n\nTexas\u2019s electricity usage has been gradually transitioning toward wind power, with the state generating more wind-powered electricity than any other.1 As policymakers search for ways to prevent a repeat of this winter\u2019s energy crisis in Texas, the shift to more reliable (and cleaner) energy sources may accelerate. Additionally, as consumers seek more consistent electric service and less volatile power bills, more residential renewable solutions and home battery systems could be in the future as well. And we\u2019re happy to lead the way.\n\n\n\nGreenbacker owns and operates a portfolio of income-producing renewable energy assets, diversified across size, power source (e.g., solar, wind, and energy storage), and geography. Our fleet encompasses 235 projects across 29 states, and its operations are overseen by our experienced technical asset management team. Our investment team ensures that Greenbacker\u2019s assets adhere to specific risk-reduction criteria, as we seek to bring renewable energy investment opportunities to market and deliver reliable returns for our investors.\n\n\n\n\n\n\n\nDisclosure\n\n\n\nThis information has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, or to participate in any trading or investment strategy. This is a private offering made only pursuant to exemptions provided by Section 4(a)(2) of the Securities Act, Rule 506(b) of Regulation D and applicable state securities laws and solicitation is limited to clients with substantive pre-existing relationships. If any offer of securities is made, it will be pursuant to a definitive offering memorandum prepared by Greenbacker Capital Management LLC (\u201cGreenbacker\u201d) that contains material information not contained herein and which supersedes this information in its entirety. Any decision to invest in the strategy described herein should be made after reviewing a confidential private placement memorandum (\u201cPPM\u201d), conducting investigations and consulting the investor\u2019s own investment, legal, accounting, and tax advisors in order to make an independent determination of the suitability and consequences of an investment. Greenbacker does not provide tax advice. Investors are urged to consult with their own tax advisors regarding an investment in the strategy described herein and the realization of any tax benefits. The information presented herein may involve Greenbacker\u2019s views, estimates, assumptions, facts, and information from other sources that are believed to be accurate and reliable and are, as of the date this information is presented, subject to change without notice. There are material risks associated with investing in alternative Investments including financing risks, general economic risks, long hold periods, and potential loss of the entire investment principal. Potential cash flow, returns and appreciation are not guaranteed Please read the PPM in its entirety, paying careful attention to the risk section prior to investing.\n\n\n\nGreenbacker Renewable Energy Company LLC is a publicly reporting, non-traded, limited liability company that acquires and manages income-generating renewable energy projects and other energy-related businesses.\n\n\n\nGreenbacker Capital Management LLC. 11 E. 44th St., Suite 1200, New York, NY 10017\n\n\n\n1 US Energy Information Administration, State Profile and Energy Estimates, March 19, 2020, https://www.eia.gov/state/analysis.php?sid=TX#5.\nThe post Wind power, freezing weather, and the renewable energy landscape in Texas appeared first on Greenbacker Capital.", "date_published": "2021-02-26T13:59:15+00:00", "date_modified": "2022-09-01T16:44:57+00:00", "authors": [ { "name": "GCM", "url": "https://greenbackercapital.com/author/chris-larsongreenbackercapital-com/", "avatar": "https://secure.gravatar.com/avatar/4c3ca5eedec27f29c7289294aef1d410?s=512&d=mm&r=g" } ], "author": { "name": "GCM", "url": "https://greenbackercapital.com/author/chris-larsongreenbackercapital-com/", "avatar": "https://secure.gravatar.com/avatar/4c3ca5eedec27f29c7289294aef1d410?s=512&d=mm&r=g" }, "image": "https://greenbackercapital.com/wp-content/uploads/2021/02/TX-blog-banner.jpg", "tags": [ "Wind", "Investment Insights", "Resources" ] }, { "id": "https://greenbackercapital.com/?p=1289", "url": "https://greenbackercapital.com/2020/12/greenbacker-renewable-energy-company-llc-acquires-wind-portfolio-totaling-50-mw/", "title": "Greenbacker Renewable Energy Company LLC Acquires Wind Portfolio Totaling 50 MW", "content_html": "\nGreenbacker Renewable Energy Company LLC (\u201cGREC\u201d) announced today that, through a wholly-owned subsidiary, it purchased a 50 MW operating wind farm from RPMA Iowa Wind Development LLC (\u201cRPMA\u201d). The project, Rippey Wind Holding LLC, is located in Greene County, Iowa and has a 25-year Power Purchase Agreement (\u201cPPA\u201d) in place with the investment-grade utility Central Iowa Power Cooperative (\u201cCIPCO\u201d). The project reached commercial operations in 2012.
\n\n\n\n\u201cWe\u2019re excited to expand our wind portfolio in Iowa with RPMA.\u201d said Charles Wheeler, CEO of Greenbacker. \u201cGREC has experienced phenomenal growth as we near the end of 2020 and Rippey is one of our largest wind projects, typifying this acceleration of acquisitions.\u201d
\n\n\n\n\u201cWe\u2019re very pleased with the sale of our Rippey Wind Farm to Greenbacker\u201d said Felix Friedman, Managing Director of RPMA. \u201cAs renewable energy continues to become the predominant form of new electrical generation in the US, the sale of our wind operating assets will enable RPMA to further escalate it\u2019s development efforts in new wind and solar energy projects in Iowa and neighboring states.\u201d
\n\n\n\nWith the acquisition of Rippey Wind Holding I, Greenbacker will own approximately 760.7 MW of generating capacity (including assets that are to be constructed), comprising 537.0 MW of utility-scale and distributed solar facilities, 192.6 MW of wind facilities, 19.1 MW of battery storage, and 12.0MW of biomass facilities.
\n\n\n\nAbout Greenbacker Renewable Energy Company
\n\n\n\nGreenbacker Renewable Energy Company LLC is a publicly reporting, non-traded limited liability energy company that acquires and manages income-generating renewable energy and energy efficiency projects, and other energy-related businesses. The projects in which we invest, such as solar and wind facilities, sell power under long-term contract to high credit worthy counterparties such as utilities, municipalities, and corporations. For more information, please visit www.greenbackercapital.com.
\n\n\n\nAbout RPMA Iowa Wind Development
\n\n\n\nSince 2000, RPMA has developed over 1.4GW of utility grade wind energy projects in Iowa and Kansas. The company is headquartered in De Soto, Iowa and continues to develop high quality energy projects for its customers with a focus on long-term, community-friendly and environmentally sound operations. For more information about the company visit www.rpmaccess.com.
\n\n\n\nForward-Looking Statements
\n\n\n\nThis press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. Although Greenbacker believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Greenbacker undertakes no obligation to update any forward-looking statement contained herein to conform to actual results or changes in its expectations.
\nThe post Greenbacker Renewable Energy Company LLC Acquires Wind Portfolio Totaling 50 MW appeared first on Greenbacker Capital.
\n", "content_text": "Greenbacker Renewable Energy Company LLC (\u201cGREC\u201d) announced today that, through a wholly-owned subsidiary, it purchased a 50 MW operating wind farm from RPMA Iowa Wind Development LLC (\u201cRPMA\u201d). The project, Rippey Wind Holding LLC, is located in Greene County, Iowa and has a 25-year Power Purchase Agreement (\u201cPPA\u201d) in place with the investment-grade utility Central Iowa Power Cooperative (\u201cCIPCO\u201d). The project reached commercial operations in 2012.\n\n\n\n\u201cWe\u2019re excited to expand our wind portfolio in Iowa with RPMA.\u201d said Charles Wheeler, CEO of Greenbacker. \u201cGREC has experienced phenomenal growth as we near the end of 2020 and Rippey is one of our largest wind projects, typifying this acceleration of acquisitions.\u201d\n\n\n\n\u201cWe\u2019re very pleased with the sale of our Rippey Wind Farm to Greenbacker\u201d said Felix Friedman, Managing Director of RPMA. \u201cAs renewable energy continues to become the predominant form of new electrical generation in the US, the sale of our wind operating assets will enable RPMA to further escalate it\u2019s development efforts in new wind and solar energy projects in Iowa and neighboring states.\u201d\n\n\n\nWith the acquisition of Rippey Wind Holding I, Greenbacker will own approximately 760.7 MW of generating capacity (including assets that are to be constructed), comprising 537.0 MW of utility-scale and distributed solar facilities, 192.6 MW of wind facilities, 19.1 MW of battery storage, and 12.0MW of biomass facilities.\n\n\n\nAbout Greenbacker Renewable Energy Company\n\n\n\nGreenbacker Renewable Energy Company LLC is a publicly reporting, non-traded limited liability energy company that acquires and manages income-generating renewable energy and energy efficiency projects, and other energy-related businesses. The projects in which we invest, such as solar and wind facilities, sell power under long-term contract to high credit worthy counterparties such as utilities, municipalities, and corporations. For more information, please visit www.greenbackercapital.com.\n\n\n\nAbout RPMA Iowa Wind Development\n\n\n\nSince 2000, RPMA has developed over 1.4GW of utility grade wind energy projects in Iowa and Kansas. The company is headquartered in De Soto, Iowa and continues to develop high quality energy projects for its customers with a focus on long-term, community-friendly and environmentally sound operations. For more information about the company visit www.rpmaccess.com.\n\n\n\nForward-Looking Statements\n\n\n\nThis press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. Although Greenbacker believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Greenbacker undertakes no obligation to update any forward-looking statement contained herein to conform to actual results or changes in its expectations.\nThe post Greenbacker Renewable Energy Company LLC Acquires Wind Portfolio Totaling 50 MW appeared first on Greenbacker Capital.", "date_published": "2020-12-11T00:58:00+00:00", "date_modified": "2022-02-03T22:05:27+00:00", "authors": [ { "name": "GCM", "url": "https://greenbackercapital.com/author/chris-larsongreenbackercapital-com/", "avatar": "https://secure.gravatar.com/avatar/4c3ca5eedec27f29c7289294aef1d410?s=512&d=mm&r=g" } ], "author": { "name": "GCM", "url": "https://greenbackercapital.com/author/chris-larsongreenbackercapital-com/", "avatar": "https://secure.gravatar.com/avatar/4c3ca5eedec27f29c7289294aef1d410?s=512&d=mm&r=g" }, "tags": [ "Iowa", "GREC", "Wind" ] } ] }