Reported from CSPPLAZA: NRG Energy plans to sell between 50% and 100% of renewables assets held by its NRG Yield business under a new transformation plan announced July 12.
NRG is the U.S.’ largest independent power generator, operating a total of 50 GW of capacity. The company operates 1.2 GW of solar assets including the 400 MW Ivanpah CSP tower plant.
NRG aims to raise up to $4 billion through targeted asset sales and reduce debt by $13 billion, the company said. NRG has targeted “rapidly executing annual improvements with 72% of run rate annual benefits of $1.07 billion achieved in 2018, 92% in 2019, and 100% achieved in 2020,” it said.
The announcement prompted “robust engagement” from potential buyers, Craig Cornelius, NRG’s senior vice president of renewables, told Bloomberg July 18.
NRG has transformed from a conventional energy business into a diversified renewables and fossil fuel power generator, but its share price has suffered.
Following pressure from activist investors, NRG agreed in February to conduct a strategic review of its business and examine potential asset sales.
“This plan is the result of a comprehensive review of our entire business by the board and management to simplify our business, right-size our portfolio and strengthen our balance sheet to create significant value for all our stakeholders,” Mauricio Gutierrez, President and CEO, NRG, said in the company’s latest statement.
NRG share price ($)
Image source : Bloomberg
NRG Yield is the group’s primary investment vehicle for renewable energy and conventional generation, owning 4.6 GW of contracted generation. The average remaining duration of NRG Yield’s offtake contracts is around 15 years.
“The strategic alternatives span a variety of ownership structures and partnerships,“ NRG said in its statement.
Options include “the potential partial or full monetization of the renewables platform and NRG’s interest in NRG Yield with a goal to optimize how NRG participates in renewables and to deconsolidate the associated debt,” it said.