ESSU Research Report No.12 with the ESSU Global Renewable Energy Secondary Market Transactions Database 2019-2020; Dexter Whitfield
Key findings
- 626 transactions in global renewable energy secondary market in 20 months in 2019-2020 cost US$289bn
- 34% of transactions involved private equity funds;
- The public sector accounted for only 4.4% of transactions;
- 140 transactions involved a parent company or subsidiaries registered in tax havens;
- Europe and North America dominated the global changes in ownership of wind, solar, hydro and battery projects;
- 38 assets were acquired into public ownership (15,270MW), 14 assets were privatised (14,504MW) and 14 assets were transferred between public authorities (5,175MW) –there was a net gain in the number assets transferred to the public sector but only a small gain in the level of MW.
- US$8.4bn of the total cost were fees to consultants, lawyers and asset management companies to negotiate transactions
- Renewable energy electricity generation is largely in the control of finance capital and market forces so, that by 2050, generation, distribution and supply could be substantially owned and controlled by the private sector.
The secondary market provides a mechanism for investors to extract profit at the development or operational stages of renewable energy projects. This process enables utility and petroleum companies to ‘shop’ around to buy ‘ready to build’ renewable energy projects without committing to creating permanent in-house development capacity.
The public policy agenda must change from general demands for climate action and targets to those that focus on how the targets are going to be met and to rapidly increase public provision of power generation. The report sets out proposals to significantly increase public ownership and operation of renewable energy projects and to increase the scope and powers of regulatory frameworks.
Further details in Public Ownership and Provision section of the website.