The energy transition is happening and we’re taking part. In the U.S., and around the world, there is clarity and growing consensus around the need for renewable energy solutions for our growing energy demand. Meeting that demand requires us to make renewable energy more competitive and mainstream by enabling the capital structures and investment that drive growth to thrive and reinvest. Threshold Power is committed to that effort and has built an organization that grows and prospers from that concept.
The leaders of Threshold Power have a long history of financing, managing and operating utility-scale wind energy assets. That experience is put to use for the acquisition and ongoing investment in operating wind power– a proven technology that made up 42% of all new generating capacity in the U.S. in 2012.
In the past ten years, installed wind power in the U.S. has grown ten-fold from 4.14 gigawatts in 2001 to more than 60 gigwatts at 2012 year-end. This growth has been supported, in large part, by the Production Tax Credit (PTC), a federal incentive meant to level the playing field for wind power, and Renewable Portfolio Standards (RPS) in place in more than half of all U.S. states. At the end of 2012, 38 states had utility-scale wind power projects in operation.
Aside from the impressive increase in installed capacity, the U.S. has also seen wind power costs drop as wind turbine technologies have reached new tower heights, larger capacities and greater efficiencies. Wind energy is now one of the most cost-effective sources of new electricity generation and serves as a stabilizer in the energy mix hedging against the volatile prices of fossil fuels. The American Wind Energy Association (AWEA) reports that wind power has been the source of nearly 38% of new generating capacity on the U.S. grid since 2008 – twice what coal and nuclear added, combined.
Resulting from this growth is a significant fragmentation of ownership across dozens of companies. Only seven companies own more than 1.5 gigawatts – a number we believe to be needed to achieve economies of scale. Threshold Power is at the forefront of a period of consolidation in the industry.
The predictability of the solar resource and advancements being made in the solar power industry make it an attractive investment and acquisition space for Threshold Power.
The Threshold Power team has significant experience with complex financing structures and operating solar power projects. As a result, solar power will be a sought after opportunity as the industry, much like the wind power industry, heads toward a period of consolidation and increased cost competitiveness.
Utility-scale photovoltaic solar and concentrating solar power (or solar thermal) projects are in place across the U.S. in growing numbers. The Solar Energy Industries Association reports that in 2012, the industry saw a 76% growth over the previous year, installing 3,301 megawatts of new capacity.
Threshold Power’s interest in renewable energy is not limited to a single technology. We will be highly selective, but will pursue acquisitions strategically and opportunistically in wind power, solar power, hydropower, biomass and geo-thermal.
Beyond the criteria of being a renewable energy source, Threshold Power will focus on acquiring projects that have predictable revenues, dependable cash flows and solid operating performance.