It's a new chapter for two of the biggest U.S. players in renewable energy.
One of them, SunEdison, entered Chapter 11 bankruptcy proceedings in April after a disastrous series of financial decisions crippled the company.
The other, competitive energy supplier NRG Energy, is entering a new phase as it restructures its renewable energy investments under a new CEO. And in the process, NRG is picking up a big chunk of SunEdison's portfolio in order to bolster its own utility-scale offerings.
Earlier this week, NRG won a bid to acquire 2,138 megawatts of solar and wind power plants from SunEdison. Today, a bankruptcy judge approved the deal, giving NRG a series of completed and in-progress projects to add to its 50,000-megawatt portfolio.
"With this court approval, we can move forward with this exciting agreement that reaffirms NRG’s commitment to renewable energy. We’ll continue working with SunEdison, its clients, stakeholders and regulators to close the transaction," said Craig Cornelius, the head of NRG's renewables business, in a prepared statement.
According to NRG spokesperson Erik Linden, the portfolio includes:
- Joint partnership interest in 683 megawatts of fully built, fully contracted solar in Utah that will commence operation in fall of 2016 (with a portion to be available for NRG Yield in 2016)
- Ownership of 200 megawatts of fully contracted, construction-ready solar in Texas
- Ownership of 1.25 gigawatts of solar and wind assets in various stages of development at locations across the U.S., including 150 megawatts of construction-ready assets in Hawaii
NRG will pay $188 million for all the assets -- $129 million upfront and $15 million after the power-purchase agreements in Hawaii are closed. NRG may pay another $44 million if certain development benchmarks are reached.
The deal is symbolic. It marks the unwinding of SunEdison, a company that once had big plans to become a "renewable energy supermajor." Those plans ultimately led to the company's downfall.
It also marks a turn for NRG, which is evolving its customer-based clean energy offerings and moving deeper into utility-scale renewables under new leadership.
Under the previous CEO, David Crane, NRG focused on revamping its retail business through electric-car charging, rooftop solar, and home energy management. Crane was fired in December of last year after a prolonged slump in the company's stock value, which was partially blamed on those investments. (Crane told GTM in April that he didn't fully understand why he was pushed out.)
Mauricio Gutierrez stepped into the role and quickly shifted attention to large-scale renewable energy power plants.
“It would be irresponsible not to embrace renewables, but we have to do it in a way that we create value for our shareholders," he told the New York Times in June.
NRG isn't fully moving away from customer-based solutions. The company's community solar business and its C&I distributed generation business is still growing, according to Linden.
In May, NRG topped GTM's list of companies most likely to buy up SunEdison's assets. If the deal is approved by regulators, NRG will walk away with a large chunk of the once-mighty SunEdison -- and reinforce its own shifting renewable energy strategy.