Sales and disposals: farms change hands

The sale of three Scottish & Southern Energy (SSE) wind farms to Infinis – a business ultimately owned by Guy Hands’ private equity fund, Terra Firma – marks an interesting development in the way in which the large energy firms will look to manage their wind assets in the future.

Taken in isolation, the deal seems rather simple, but when looked at in conjunction with the news from Bloomberg New Energy Finance that wider investment in renewables is falling, the agreement is perhaps indicative of the larger energy companies looking to hedge their bets on their future liabilities, and in the main, act merely as net energy buyers.

On the other side of the coin, wind farms can make a lot of sense for private equity backers. Well supported by the insurance industry, and with technology continuing to improve and ensure greater reliability, operations and management can be achieved efficiently without unsustainable capital costs.

Whether 2011 will see a huge raft of similar deals is debatable. The private equity industry is recovering from its own malaise as a result of the financial crisis, and for many China is the centre of attention. With Infinis aiming to achieve 230MW of under management by 2013, however, other energy suppliers will have undoubtedly started to look at the benefits to similar disposals.

The sale of three Scottish & Southern Energy (SSE) wind farms to Infinis – a business ultimately owned by Guy Hands’ private equity fund, Terra Firma – marks an interesting development in the way in which the large energy firms will look to manage their wind assets in the future.

Taken in isolation, the deal seems rather simple, but when looked at in conjunction with the news from Bloomberg New Energy Finance that wider investment in renewables is falling, the agreement is perhaps indicative of the larger energy companies looking to hedge their bets on their future liabilities, and in the main, act merely as net energy buyers.

On the other side of the coin, wind farms can make a lot of sense for private equity backers. Well supported by the insurance industry, and with technology continuing to improve and ensure greater reliability, operations and management can be achieved efficiently without unsustainable capital costs.

Whether 2011 will see a huge raft of similar deals is debatable. The private equity industry is recovering from its own malaise as a result of the financial crisis, and for many China is the centre of attention. With Infinis aiming to achieve 230MW of under management by 2013, however, other energy suppliers will have undoubtedly started to look at the benefits to similar disposals.

The sale of three Scottish & Southern Energy (SSE) wind farms to Infinis – a business ultimately owned by Guy Hands’ private equity fund, Terra Firma – marks an interesting development in the way in which the large energy firms will look to manage their wind assets in the future.

Taken in isolation, the deal seems rather simple, but when looked at in conjunction with the news from Bloomberg New Energy Finance that wider investment in renewables is falling, the agreement is perhaps indicative of the larger energy companies looking to hedge their bets on their future liabilities, and in the main, act merely as net energy buyers.

On the other side of the coin, wind farms can make a lot of sense for private equity backers. Well supported by the insurance industry, and with technology continuing to improve and ensure greater reliability, operations and management can be achieved efficiently without unsustainable capital costs.

Whether 2011 will see a huge raft of similar deals is debatable. The private equity industry is recovering from its own malaise as a result of the financial crisis, and for many China is the centre of attention. With Infinis aiming to achieve 230MW of under management by 2013, however, other energy suppliers will have undoubtedly started to look at the benefits to similar disposals.