The universe of renewable energy YieldCos

I have long-believed in the necessity and potential for renewable energy, putting my money where my mouth was in 2012 via the Abundance Investment crowdfunding platform. My first investments were Padero South Downs and Resilient Energy Great Dunkilns. Padero South Downs aimed to provide free solar panels for residents in the UK’s South Downs region, however the project stumbled with the contractor being put into liquidation. Abundance decided this would create further delays and increase the risk to expected returns, so the debentures were paid back at par value. Resilient Energy Great Dunkilns (REGD) was more successful and its wind turbine continues to produce clean energy to this day, according to the project’s website. Abundance’s stake was eventually sold on to a local community benefit society and debenture holders received their capital back plus an 18 per cent premium calculated on the basis of outstanding capital. Over a six and a half year period REGD generated returns of 26 per cent or 4.01 per cent per year, although Abundance states an Internal Rate of Return (IRR) of 6.75 to 8 per cent variable. The difference here is probably due to my slightly more conservative calculation denoting a time period where my capital was in and then out, rather than when the investment officially closed and concluded. Nevertheless, for a single crowdfunded wind turbine, I thought this wasn’t a bad result.

Anyway, the point of this post wasn’t actually to talk about the Abundance platform because I’m likely to do that on another occasion. I really wanted to talk about larger scale renewable energy YieldCos. I’ve recently started to build a stock portfolio consisting of YieldCos in order to move away from Abundance and double down on my renewable focus. I like the idea of dependable dividends based on clean energy as well as investing in a somewhat defensive sector – people always need electricity. Unfortunately, I’m slightly behind the curve since many YieldCos have in recent months seen considerable interest from investors given the negative interest rate environment. Low interest rates have pushed many investors into alternative assets in the hunt for yield.

Researching different YieldCos has enabled me to discover companies listed on a number of different stock exchanges, focusing on a variety of different renewable technologies. One UK-based open-ended investment fund, Gravis Clean Energy, has been particularly useful in helping me deconstruct how various YieldCos have been pulled together into a coherent strategy. The other entity I’ve been analysing is the Green Global Equity Income Portfolio by Tom Konrad. Although I’ve already bought stock in several companies, I want to use this post just to list some of companies initially identified, grouping them according to where their primary listing is. I’ve also identified other companies that fit more broadly into the renewables industry. I plan to look at these in more detail at a later date.

YieldCos

US

Atlantica Yield – solar, wind, hydro, gas, transmission lines and water in US, Spain, South Africa, Uruguay, Peru, Mexico, Chile and Algeria.

Brookfield Renewable Partners – solar, wind, hydro in US, Canada, Colombia, Brazil, Europe and Asia.

Pattern Energy Group – solar and wind assets in US, Canada and Japan.

TerraForm Power – solar and wind in US, Canada, Spain, Portugal, Chile, UK and Uruguay.

NextEra Energy Partners – wind, solar and gas in US.

Clearway Energy – wind, solar, gas and thermal in US.

Canada

TransAlta Renewables – wind, hydro, gas and solar in US, Canada and Australia.

UK

John Laing Environmental Assets – wind, solar, waste, wastewater, anaerobic digestion and hydro in UK and France.

NextEnergy Solar Fund – solar in the UK.

Renewables Infrastructure Group – wind, solar and battery storage in UK, France, Ireland, Sweden and Germany.

Foresight Solar Fund – solar in UK and Australia.

Greencoat UK Wind – wind in UK.

Bluefield Solar Income Fund – solar in UK.

Aquila European Renewables Income Fund – hydro, wind and solar in Finland, Norway, Denmark and Portugal.

US Solar Fund – solar in US.

Germany

Encavis – solar and wind in Austria, Denmark, Germany, Italy, Finland, France, UK, Spain, Sweden and the Netherlands.

Ireland

Greencoat Renewables – wind in Ireland.

Miscellaneous

US

Hannon Armstrong Sustainable Infrastructure Capital – behind-the-meter, grid-connected and sustainable infrastructure.

New Zealand

Meridian Energy – hydro, solar and wind in New Zealand and Australia, operating as a full service utility company.

Denmark

Vestas Wind Systems – wind turbine manufacturer.

Orsted – wind, solar, energy storage, bioenergy in Denmark, UK, US, Germany, the Netherlands and Taiwan, operating as a full service utility company and developer.

Spain

Siemens Gamesa – wind turbine manufacturer.

Germany

Nordex – wind turbine manufacturer.

UK

Gresham House Energy Storage Fund – energy storage in UK.

Gore Street Energy Storage Fund – energy storage in UK and Ireland.

Sustainable Development Capital Energy Efficiency Income Trust (SEEIT) – energy efficiency in UK, US and Spain.

Main photo: Wind turbine in Glyndebourne by Mark Bridge licensed under Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0).