[The Vector] Italian Solar Developers Reshape and Change Gear
Rete Rinnovabile, Italy’s largest solar power generation company, was acquired in October by private equity group Terra Firma for €670 million ($930 million, according to a report in the Financial Times. The deal gives Terra Firma a 10% stake in the Italian solar power market.
Demand for power in Italy is expected to rise 1.7% this year after falling almost 7% last year, according to Terna. Italian demand is not expected to reach pre-crisis levels before 2014. Solar power plants in Italy have been guaranteed very attractive long term tariffs by the government.
Terra Firma already owns Everpower, a US wind farm development company, which it acquired for $350 million at the end of 2009, and Infinis, the largest pure renewables power generator in the UK. Infinis generates almost 350 MW of electricity from gas drawn from 124 landfill sites. It has a small interest in hydro power and operates 3 onshore wind farms, generating an additional 75 MW.
Terna’s plans for the money
Rete Rinnovabile has been sold by Italy’s national grid operator,Terna. The proceeds of the sale will be used to invest in energy projects that give it a greater return than Rete Rinnovabile – including new solar projects, Terna told Reuters.
The Italian grid operator points to its track record with Rete Rinnovabile as an example of its imaginative value creation in tough markets. “We have shown that Terna, on top of its regulated business, can create value in other non-regulated energy areas,” a Terna senior manager told Reuters.”In a year we have been able to plan, build out, fund and sell an activity from nothing.”
Terna recently became a partner in the Desertec project, with its plan to invest up to €500 million in solar generation in North Africa, supplying Europe with 15% of its energy needs by 2050. Terna will be heavily involved in the construction from Tunisia of the first North Africa-Europe interconnector.
“Tunisia, which will be the first connection between Europe and North Africa, will provide us with a higher return than our Italian regulated business,” the Terna spokesman told Reuters. Terna is also investing over €750 million in an interconnector between Italy and Montenegro, across the Adriatic Sea.
Rapid development
Meanwhile, in November, SunEdison completed a 70 MW solar PV project at Rovigo in Northern Italy. It is the largest PV plant in Europe. The company has also signed agreements for more than 400 MW of projects in different countries around the world. In October, SunEdison sold the project to a joint venture partner, infrastructure investor First Reserve for $382 million.
“With construction completion in less than one year, we believe this deployment signifies a new milestone for the industry and will become the standard for future mega projects,” said Carlos Domenech, President of SunEdison.
