Read GreenFront’s Q4’24 Quarterly Market Update for insight on these topics and more. It’s our way of helping readers to stay up to speed on topics like Capital Markets, M&A, Project Development, and Corporate PPA Activity. Don’t hesitate to reach out to our team with questions, comments, or any feedback you have.

GreenFront is pleased to announce the successful closing of CEP Solar’s joint venture and new investment from Perennial Power, a subsidiary of Sumitomo Corporation of Americas.

After a year + of challenging market conditions that was punctuated by the Fulcrum BioEnergy Chapter 11 and other project cancellations, it has been noteworthy to see a flurry of M&A and Fundraising announcements in the past 3 weeks – see the list linked below with commentary of 7 relevant transactions we have seen month-to-date.

GreenFront Energy Partners served as exclusive financial advisor to SolaREIT in its note issuance to MetLife Investment Management (MIM), the institutional asset management business of MetLife, Inc.

2024 has seen a flight to quality across the Energy Transition value chain, an improvement to 2023’s stalled markets. Continued investor rotation into larger funds weighs on early-stage developers and capital markets activity has been highly concentrated in the largest developers and IPPs with established PE/Infrastructure backing and late-stage development pipeline.

All this activity is adding to the installed base of renewable generating capacity which is driving lots of strategic activity in the services sector, an area that’s drawn significant attention from both energy-focused and generalist funds.

Policy makers were active in Q2’24, releasing a mixed bag of helpful and worrisome announcements with the potential to shake-up the industry. Again.

Getting ahead of it all, strategic activity for the quarter was up across the board relative to the last twelve months, largely concentrated in private markets. It’s a buyer’s market for well-capitalized developers and liquid funds. Private capital fund-raising appears to be robust for high-pedigree name brand funds, while smaller funds continue to struggle with LPs. A “Have’s & Have Not’s” dynamic is unfolding.

While recent activity suggests a healthy start to 2024, successful fundraising has been concentrated at the top of the market. Developers are cautiously optimistic that markets conditions will be better this year than last though some indicators suggest more of the same.

GreenFront Energy Partners provided strategic and financial advisory services to Universal Corporation in its virtual power purchase agreement with Clearway Energy Group.

Global fundraising in 2023 is headed for its lowest level in almost a decade. Interest rates and regulatory uncertainty have slowed M&A activity, impacting LP distributions and compounding challenges in the capital markets.

GreenFront is pleased to announce the successful closing of Kendall Sustainable Infrastructure’s development and growth capital investment in GreenSpark Solar, a leading community, commercial, and residential solar construction and development company in the New York market.

GreenFront Energy Partners (“GreenFront”) is pleased to announce the successful closing of Modern Energy’s equity commitment to NovoHydrogen (“Novo”), the premiere North American green hydrogen developer. Founded in 2021 by Matt McMonagle, Novo develops onsite and near-site green hydrogen projects for its customers across a variety of sectors.

The last several years have been marked by market disruptions which led to a broad pause on exits by Private Equity firms. Recent events signal a trend reversal as we’re seeing higher expectations for upcoming IPO activity and major renewables transactions are clearing.

Capital markets and valuations pertaining to Energy Transition have softened as investors and LP’s await clarity from Treasury and IRS around IRA details. Numerous regulatory items, while ultimately positive, remain unclear, causing investors to take a wait-and-see approach.

Global investment in the energy transition totaled $1.1 trillion in 2022 – a new record and a huge acceleration from 2021 (BNEF). 2023 is setting up to be another big year as investors begin to transact on new tax credits for RNG (e.g. GIP/Amber) and stand-alone battery storage (e.g. Eolian/Churchill Stateside Group).

Since our last post, the Treasury and IRS have released additional guidance around a handful of provisions in the Inflation Reduction Act, covering topics from prevailing wage and apprenticeship programs, to details around the low-income communities bonus credit.

GreenFront is pleased to announce the successful closing of a Series C funding round for LoCI Controls, Inc. The new funding will enable LoCI to accelerate product development and increase adoption of the Company’s real-time data and control technology used to increase methane capture and reduce emissions at landfills.

Despite a challenging macro environment, positive momentum driving the Energy Transition persists. The Inflation Reduction Act is estimated to boost U.S. clean energy installations and funds are flowing from the Infrastructure Investment and Jobs Act.

Activity in the capital markets is far more mixed. Public Cleantech equities are once again testing YTD lows, excluding Alternative Fuels/RNG as the notable bright spot. Private market valuations also remain high in light of inflationary pressures and rising rates.

GreenFront is pleased to announce the successful closing of a corporate equity capital investment between Nu:ionic Technologies (“Nu:ionic”) and an undisclosed strategic partner. The initial funding will support late stage development and commercialization of Nu:ionic’s proprietary Microwave Catalytic Reforming (“MCR”) technology, enabling low-cost on-site clean hydrogen production.

GreenFront is pleased to announce the successful closing of a joint venture and subsequent capital raise between Dairy Biogas Company (“DBC”) and an undisclosed major independent U.S. energy supplier. The transaction will form and capitalize a joint venture between the two parties to support the development, construction, and long-term ownership of dairy-to-RNG production facilities across 7 dairy farms in the Midwest. Once operational, the initial project will include over 10,500 cattle and produce over 200,000 mmbtu of RNG per year in aggregate. Further, the partnership establishes a development platform for future origination, funding, and ownership of similar prospective project opportunities in the region.

The Inflation Reduction Act’s passage in the Senate is a landmark piece of legislation, representing the largest and most comprehensive climate package in U.S. history. While not final, the bill would broadly enhance support for clean energy initiatives ranging from wind and solar to nuclear and electric vehicles, and more. That, combined with a two-year moratorium on new tariffs for imported solar modules, has injected much needed certainty into markets that struggled to gain momentum through the first half of 2022.

A confluence of factors are creating headwinds for the Alternative Energy space: regulatory obstacles such as the “circumvention tariffs”, rising interest rates are particularly tough on pre-revenue projects & companies, capital markets volatility causing an average 30% decrease in the public stocks we track.

Yet despite this more difficult backdrop, the long-term investment thesis underpinning energy transition remains strong: building end user preference, scaling verticals, and accommodative structures such as the recent SEC proposal for standardized climate impact disclosure requirements for Corporates. A reflection of this is GreenFront’s personal experience with seeing no scarcity of capital in our transactions.