Financial turmoil at SunEdison imperils solar projects worldwide
By Nichola Groom
LOS ANGELES (Reuters) - In November, solar energy giant SunEdison IncSUNE.N reported that its project pipeline had grown by 75 percent in just a year, the result of an aggressive growth strategy.
Now, five months later, many of those projects are imperiled as SunEdison reportedly prepares to declare bankruptcy.
SunEdison’s rapid growth in planned capacity - from 4.5 gigawatts to 7.9 GW in 12 months, according to a company press release - was propelled by an acquisition spree and aggressive underbidding of rivals on projects. Put in perspective, a typical nuclear power plant has a capacity of 1 GW.
Among the deals now in question is a solar plant under construction for the central Texas community of Georgetown. SunEdison initially told officials there it would self-finance the project, but now wants to make alternative funding arrangements.
At SunEdison’s request, the city last month authorized financing through Morgan Stanley(MS.N: Quote), but the financial services firm has yet to agree to the arrangement.
In February, Hawaiian Electric Company HE.N cited project delays in cancelling a contract with SunEdison to purchase power from three solar facilities the company was building on the island of Oahu.
And last month, TerraForm Global(GLBL.O: Quote) - a related company set up to own and operate clean energy assets developed overseas by SunEdison - warned of delays in construction on two projects in Uruguay and a wind venture in India. Another of SunEdison’s Indian ventures, a 500 megawatt solar plant that is one of the country’s biggest forays into renewable energy, has not yet broken ground. Industry sources said it will likely be re-bid unless another company steps in to buy it.
SunEdison declined to comment on the number and status of its unfinished deals. Company releases and news reports suggest the company has dozens of projects in development, ranging from massive power plants to small rooftop arrays. Continued...