US independent power producer Clearway Energy (CWEN) has published its financial results for the third quarter of this year, with the company’s renewable energy facilities generating a net income of US$112 million in the first nine months of the year.
This figure compares favourably to the income generated by renewable projects in the first nine months of 2022, which stood at US$26 million, and to the income generated by the company’s fossil fuel projects, which stood at US$99 million in the first nine months of 2023. CWEN’s fossil fuel sector earned US$121 million in the first nine months of 2022, demonstrating how, for CWEN at least, renewable projects have become more financially lucrative, while fossil fuel projects are generating less revenue.
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Some of those falls in revenue stem from one-off events, such as the suspension of work at the company’s El Segundo gas-fired facility in August 2022 due to damage at the facility. However, much of these encouraging renewable figures stem from investments made into the company’s renewables, and particularly solar, portfolio. In October this year, the company started commercial operations at its Daggett solar-plus-storge facility after two years of work, and plans to expand the project further.
This trend may continue, with the company having signed agreements to acquire interests in the Texas Solar Nova 1 and 2 projects in Kent County, Texas, which will add 452MW of solar capacity to CWEN’s portfolio.
“With the commitment to invest in the Texas Solar Nova projects and the recent projects offered to CWEN, we now have full visibility into the deployment of the excess thermal proceeds through commitments or offers,” said Christopher Sotos, CWEN president and CEO.
Pipeline developments
The company is also considering a potential investment into a 572MW solar-plus-storage portfolio, although financial details of this transaction have not yet been announced. On a conference call announcing the results, Sotos also noted that the company plans to further developments across its 26.8GW pipeline.
“As a result of our sponsor’s continued development efforts, we also have visibility into additional drop-down offers anticipating in the first half of 2023, leading to the deployment of an approximate additional $220 million of CWEN’s corporate capital,” said Sotos. “Our sponsor’s development pipeline also continues to grow, outstanding at 26.GW, including 6.8GW of late-stage projects expected to feature commercial operations in the next three years.”
The company’s leadership also expressed confidence regarding some of the issues affecting the solar supply chain in particular, such as the regulations of the Uyghur Forced Labour Prevention Act (UFLPA), compliance with which could limit silicon imports from China.
“The estimated cash available for dividends presented in today’s earnings material for future drop-downs all reflect our anticipation that we’ll be able to successfully comply with UFLPA because of the supply chains we procured from,” said CWEN CEO Craig Cornelius on the conference call.
“There’s the possibility that there would be temporary confirmatory holes of the border for industry participants broadly which are in place today, but we think it’s a pretty manageable risk for us just because of the fact that we have modules coming in freely today because of who we bought from and where their supply comes from.”