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Volkswagen deal to boost EVs, Sungevity to be acquired and listed

Volkswagen deal to boost EVs, Sungevity to be acquired and listed


Volkswagen settled its emissions cheating scandal with the US federal government and the state of California for $15.3bn last week, of which $2bn will be earmarked to finance and deploy electric vehicle charging and hydrogen refuelling infrastructure across the US over 10 years.Bloomberg New Energy Finance expects sales of electric vehicles from the VW Group in the US to grow significantly over the next five years. Further analysis of what the settlement means for the group, and the US market, can be found in our note: Emissions scandal settlement; VW forced to love EVs.

Under the settlement, VW set aside as much $10bn to cover costs including buying back vehicles at pre-scandal values and compensating drivers as much as $10,000 per car for their troubles. VW also reached a deal with two US agencies and with 44 states, including New York. The lack of class-action lawsuits is a major disadvantage for European consumers however: the 8.5m customers in Europe may only get an hour-long visit to the dealer to have their engines repaired with a tube that regulates air flow or a software update.

Hanergy Holding Group introduced four cars powered by solar panels as it sought to expand the use of photovoltaic technology to products ranging from furniture to bags. Cars powered by solar cells can be commercialised, the company said in a statement. The cars, which can be charged in daylight while being driven, also contain lithium batteries, making it possible to be charged in stations. Hanergy Holding is the Beijing-based parent of Hanergy Thin Film Power Group, the Chinese solar equipment maker whose shares were suspended more than a year ago after a 47% plunge in one day.

Meanwhile, Tesla Motors delivered 14,370 vehicles in the second quarter, missing its forecast of 17,000 units because of what it called an “extreme production ramp” that saw half of the quarter’s production in the final four weeks.Iran is also seeing developments in electric vehicles. Iran Khodro, an automaker in Tehran, is in talks with LG International to develop EVs for the local market. “Negotiations are under way,” said Hashem Yeke Zare, managing director of Khodro. The companies may clinch the deal in the autumn, he said in an interview in Tehran. LG International, which is based in Seoul, would supply batteries and other components to the automaker and install charging stations. Khodro would make the cars. The partners aim to manufacture 60,000 vehicles by 2023.

Analysis of the Siemens-Gamesa merger in onshore wind was published last week. Both turbine manufacturers will benefit through access to new markets and technology, according to Bloomberg New Energy Finance.Under the deal, Siemens and Gamesa agreed to combine their onshore wind operations: Siemens will own 59% of the capital of the new business, while Gamesa gets 41% and a EUR 1bn ($1.1bn) cash payment of EUR 3.75 a share from Siemens.

On the solar side, US residential and commercial solar energy provider Sungevity is set to be acquired by publicly traded asset manager Easterly Acquisition for about $357m, it emerged last week. The transaction would make Sungevity a publicly traded company. Easterly Acquisition was formed to buy ventures that want to reach investors without going through a traditional initial public offering, according to its chairman, Darrell Crate. Sungevity will receive about $200m in cash for business operations at closing. The acquisition is expected to close in the third or fourth quarter.

In Brazil, an energy auction scheduled for 29 July was cancelled as demand declined. Power consumption in Brazil declined 4.2% in the first quarter from a year earlier, with industrial use slumping 7.5%, according to the government’s Energy Research Agency, known as EPE. The country has an energy surplus and the government will focus on addressing the problems of distributors, which have signed contracts to purchase more power than they need, energy minister Fernando Coelho said. Another auction in October remains on the schedule, and may be bigger than originally envisaged.

That however does not mean that the earlier winners of projects in auctions will be shown any leniency. Brazil may impose penalties of as much as BRL 150m ($46.3m) on developers that fail to meet deadlines for the nation’s first large-scale solar farms. The country will probably reject an extension request from developers that have pledged to complete solar farms by October 2017, and will cancel contracts for companies that are not able to meet that deadline, applying fines of 5% of planned costs, according to the ministry’s planning secretary, Eduardo Azevedo.

Brazil held its first energy auction with a dedicated category for solar power in 2014, and eight companies including Renova Energia, Rio Alto Energia, Canadian Solar and Enel won contracts. A group of seven — all but Enel — requested an extension in February for their BRL 3bn of planned projects, after the economy slumped.

Dong Energy made its final decision last week to invest in the 450MW Borkum Riffgrund-2 wind project off the coast of Germany. The project could cost as much as $2bn.Pattern Energy Group, a publicly traded yieldco, agreed to pay $269m for controlling stakes in a 324MW wind project in New Mexico and an associated transmission line.


Anand Gupta Editor - EQ Int'l Media Network


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