BAKU, Azerbaijan, July 21
By Leman Zeynalova – Trend:
Renewable energy dealmaking will likely rise in 2021 as companies, utilities, and governments prepare to meet ambitious climate targets, Trend reports with reference to Deloitte.
“Different types of industry players will likely consolidate their positions across the value chain. A growing number of special-purpose acquisition companies (SPACs) entering the clean energy space may also boost investment in renewables companies. Rising state renewable portfolio standards, increasing levels of corporate and residential demand, and improving economic competitiveness continue to be the key drivers for utilities’ and other energy companies’ interest in renewables. Federal support, mandates, and stimulus could provide additional powerful drivers in 2021,” reads a report published by Deloitte.
The company notes that the renewables segment continues to capture a significant share of deal activity in the power and utilities industry: 144 of the 174 merger and acquisition deals announced through early December involved renewable energy assets or companies.
“Additionally, increasing challenges to gas pipeline projects may serve as an incentive for electric companies to bypass plans to invest in natural gas as a bridge fuel and double down on potentially less risky investments in renewables. In the most significant harbinger of this trend in 2020, Dominion Energy and Duke Energy canceled their joint Atlantic Coast Pipeline project due to high costs and legal challenges, and Dominion sold its gas transmission and storage business to focus on its state-regulated, sustainability-focused utilities.4,5 For investors, renewable energy assets may enhance their portfolios by generating steady cash flows and providing asset diversification. Developers and installers may see opportunities for consolidation among distributed energy resource (DER) providers to lower costs, restructure projects to better handle delays, and gain efficiencies from complementary businesses.”
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