Analysis
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Fundraising for infrastructure funds globally was challenging in H1 2024, with data from sister publication IJInvestor revealing that $57.85 billion was raised by 40 funds that hit final close. North America-focused funds too have not been popular among investors over the last 2 half years, representing just 11% of capital raised.
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Spanish renewables developer Grenergy reached financial close in July 2024 for the first 2 phases of its Oasis de Atacama solar-plus-storage project in Chile, the largest storage project in the world according to the company.
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Tax credit transferability has dramatically altered the tax equity market since it was introduced in 2023 under the Inflation Reduction Act. From bringing in more would-be investors and facilitating the creation of online platforms to sell credits, transferability immediately expanded the traditional $20 billion (or so) tax equity market. In 2023 it added around $9 billion of new deals and is expected to double the market by the end of 2024.
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The energy transition in the US has been turbo-charged in recent years by sweeping federal government tax reform and state-level emissions targets. Despite the gigawatts of renewables being built across the nation, getting power connected to load markets remains a problem – transmission infrastructure is the hold up.
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Mexico’s renewables market had been described by some industry professionals as at “rock bottom” but with a change at the political top the market is bracing for a rebound.
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For more than 7 months the government of Alberta paused the approval of new renewable energy projects causing a multi-gigawatt logjam with upwards of $25 billion of investment sat idle.
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The tax equity market was changed forever with the introduction of the Inflation Reduction Act (IRA). As the last of the guidelines for these renewables tax breaks – specifically transferability rules – are ironed out the market has already found innovative ways to take advantage of the new regime.
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A stalled bill to extend tax breaks for data centres in Michigan has been touted as the bellwether for a co-generation comeback.
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As the Lone Star State begins to face the climbing summer temperatures, intense weather events, specifically Winter Storm Uri, remain at the top of Texans' minds.
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Clean hydrogen projects across the US are generating enormous interest but many struggle to reach bankability as many risks, such as technology, supply chain, regulation and offtake, are halting progress.
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The New York State Energy Research and Development Authority (NYSERDA) in April cancelled contracts for 4GW of offshore wind projects after GE Vernova "caused material changes" by scrapping its turbine design for the projects.
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Brazil is already the leader in the energy transition. The country’s power matrix stands out in its composition with close to 90% coming from renewable sources including hydroelectricity. Yet, growth opportunities remain vast in the renewable sector and beyond. According to the Brazilian Association of Infrastructure and Base Industries (ABDIB), Brazil is looking to bridge a $50 billion a year gap in infrastructure investments.
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Patent infringement lawsuits are becoming commonplace in the renewable energy sector as manufacturers look to take advantage of the US’ lucrative tax credit regime.
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Renewables developers are readying themselves for more supply chain disruption as additional tariffs on China-made panels are under consideration from the US government.
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The US offshore wind sector continues to gain momentum with the latest round of regulatory approvals as financiers begin to prep the paperwork to fund these mega projects.
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Green hydrogen promises to be a game changer in global energy transition with the possibility it presents in decarbonising industries. Latin America has positioned itself as a frontrunner in the emerging space with mega projects being lined up by developers across the continent.
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Renewable M&A activity in Latin America has slowed down in the last year, a phenomenon not endemic to the region with lower anticipated returns, high interest rates, and other factors including low energy prices hindering the space across jurisdictions.
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Financing greenfield projects across Latin America had been tough over the past few years as inflation and high interest rates continued challenge the region’s renewable energy sector.
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The largest clean energy infrastructure project in US history was closed just before we started the new year. Pattern Energy inked $11 billion in financing for its 500+ mile transmission line connecting more than 3.5GW of stranded wind resources – SunZia.
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When the tax equity market was transformed in 2023 with transferability, it was not only the tax equity market and energy players that were excited about the new credit capabilities. The guidelines released in June 2023 opened the market to any other investors with tax appetites, and tax transfer platforms hope to streamline the process for new investors.
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