Table of Contents
Executive summary ........................................................................... 3
Outlook ....................................................................................................................................3
Valuation ..................................................................................................................................4
Risks ........................................................................................................................................5
A view on wind in the US ................................................................. 6
Excerpts from the US Congressional Research Service report on wind in the US....................6
Worldwide positioning of the US wind market.............................. 9
The US is quickly catching up ...................................................................................................9
The position of wind in the US energy markets ........................... 11
Fast growth but low penetration.............................................................................................11
What will drive US growth? ........................................................... 16
A view into US energy policy ..................................................................................................16
American Recovery and Reinvestment Act 2009....................................................................16
Changing the micro-economics of a wind project...................................................................16
Transmission infrastructure upgrade in the US.......................................................................17
American Clean Energy and Security Act 2009.......................................................................18
ACES bill – RPS mandate ........................................................................................................20
The US wind market ....................................................................... 21
Some states are better than others for investing in wind power............................................21
Economics of a US wind farm ........................................................ 29
ITC or PTC? Not only a matter of IRR… ..................................................................................29
Financial implications of a Clean Energy Act ................................ 32
Impact of the RPS requirements on renewable installation ....................................................32
Impact of the CO2 cap-and-trade system ...............................................................................35
Concerns: just a market for Americans? .................................................................................37
Players in the US market ................................................................ 38
The players.............................................................................................................................40
Analysis of the pipeline ...........................................................................................................41
How to benefit from the US wind market..................................... 44
Ranking the companies by the information we have ..............................................................44
Impact on our DCF Valuation: The pipeline is worth more......................................................47
Iberdrola Renovables Investment Thesis ...................................... 51
Outlook ..................................................................................................................................51
Valuation ................................................................................................................................51
Risks ......................................................................................................................................51
EDP Renovaveis Investment Thesis ............................................... 53
Outlook ..................................................................................................................................53
Valuation ................................................................................................................................53
Risks ......................................................................................................................................53
Appendix I: Understanding how we value windfarms................. 55
Appendix II: DCF analysis for windfarms in US ............................ 57
Appendix III: M&A wind transactions table .................................. 59