NRG Energy’s renewables earnings up as company splits into segments

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Leading US solar developer NRG Energy is to reorganise its renewable energy business after posting mixed second quarter results.

The company’s earnings from renewable energy increased by US$69 million compared to the same period last year, though it reported a net loss for the first six months of this year of US$153 million, or US$0.48 per diluted common share. However this was an improvement on last year’s figures, when net losses for the first six months of 2013 totalled US$208 million, US$0.66 per share.

The company posted profits in its wholesale operations, which includes figures for both its renewable energy projects and NRG Yield, the ‘yield co’ launched in 2013. In the first half of 2013, renewables had earned US$28 million. For the same period of this year the figure stood at US$97 million, which NRG ascribed to the addition of a wind portfolio as well as the start of operations for Ivanpah, a vast 392MW solar thermal project and California Valley Solar Ranch, a 250MW PV plant. 

NRG Yield earned US$201 million in the first six months of the year, including US$109 million in the second quarter of the year. One of the first yield cos launched globally to include solar assets, the investment vehicle handles a mix of conventional and renewable energy sources and has been followed by similar offerings from companies including SunEdison and NextEra Energy.

Paying out dividends roughly comparable to high interest savings accounts of around 4.5% to 10%, yield cos have become increasingly popular with institutional investors. NRG announced in the latest results that its ‘drop down’ of assets into NRG Yield from the parent company, completed at the end of June, was made for a cash consideration of US$357 million. The drop down included the sale of a 550MW natural gas plant and two 20MW solar PV plants from the parent company to NRG Yield.

Last week on the eve of the financial results being published, NRG announced that it would be splitting the company into six segments; three core businesses, two special purpose vehicles and the yield co.

The three core businesses will be NRG Home, which will include the group’s retail, residential solar and home products and services, NRG Renew, which includes NRG’s utility scale solar and wind microgrid projects and finally NRG Business, which will deal with wholesale and commercial operations as well as energy services to businesses including on-site generation.

Additionally, the two special purpose vehicles will be Petra Nova, a carbon-capture retrofit project on a coal plant owned by NRG, and NRG eVgo, which is working on a network of charging stations for electric vehicles (EVs).

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