First Wind Deal Expected to Open New Markets for Alternative Energy Projects

Nov 18, 2014

First Wind's farm in Mars Hill, Maine.
Credit Courtesy UPC Wind

A Midwest solar power company, and its subsidiary, are joining forces to acquire First Wind, in a deal valued at roughly $2.4 billion. Boston-based First Wind operates five wind farms in Maine and is developing a sixth in Aroostook County. Analysts say being acquired by SunEdison and TerraForm Power will give First Wind the opportunities and capital it needs to bring wind and solar energy to new markets.

 

On a Webcast announcing the merger, Paul Gaynor spoke of the rapid growth his 10-year-old company has been experiencing. Gaynor is First Wind's CEO. The firm's collection of projects in the Northeast, the West and Hawaii produce nearly 1,300 megawatts of electricity. That's enough to power around 425,000 homes a year.

"I'm sure a lot of you folks are saying, 'Great, you've had success in the U.S. How do you scale and leverage this on an international basis?' " Gaynor says.

He clicks his PowerPoint presentation to slide 22. "The beauty of this deal, from my perspective, and why we're all excited" - the slide is showing a map of the world, with stars marking counties in Europe, Asia, Australia, Africa and South America - "if you look at all of these stars on the map, this is where SunEd has development boots on the ground. Not a lot of wind expertise. But they've got a lot of in-country expertise, a lot of policy expertise. And they know the markets there."

First Wind will now get access to some of those markets. And that's not all, says Corey Honeymann, a solar analyst at GTM Research in Boston. "First Wind basically gets to benefit from SunEdison's access to low-cost capital," Honeymann says - through the other party in this deal, a company called TerraForm Power.

The SunEdison subsidiary is what's called a "yieldco" - that's a renewable energy company that owns revenue-generating assets such as wind farms and solar and hydro-electric power plants. Honeymann says access to low-cost capital will give First Wind "a unique competitive advantage, when it thinks about submitting new bids for projects - both in the U.S. and beyond the U.S. market as well."

For SunEdison and TerraForm, meantime, the deal isn't just about adding more wind power capability. Honeymann says First Wind's solar investments are growing rapidly. "So within the past 12 months or so, First Wind went from having a 0 percent market share in the utility share scale solar market in the U.S., to becoming the 11th largest in the U.S. market," he says.

Under the deal, SunEd subsidiary TerraForm will increase its power-generating capacity by more 50 percent, when it takes more than 521 megawatts of wind production from First Wind.

A spokesperson with the Maine Public Utilities Commission says officials are still analyzing the merger to see what, if anything, it will mean for First Wind's operations on the ground here.