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.

GreenFront is pleased to announce the successful closing of Energy Assurance’s sale to Element Materials. EA is a leading cell and battery testing company in North America with over a decade of experience in the battery-powered products industry. The company provides testing services for the world's leading electric vehicle, energy storage, and connected technology businesses, helping to enable widespread electrification and support the overall Energy Transition.

In light of ongoing development challenges and uncertainty around federal policy, investment appetite for Alternative Energy remains strong. Last year, investors deployed $900 billion of capital toward Energy Transition and Climate Tech sectors and more is expected in 2022 despite recent market underperformance. Areas like Hydrogen, Electrification, and Alternative Energy Services/Infrastructure are front of mind for private equity and venture investors due to compressed returns in more “traditional” verticals like solar and wind.

Momentum supporting the Energy Transition continues to build. This quarter we’ve already seen a handful of major IPOs, large platform investments in AE developers, and more activity from traditional O&G investors/operators securing positions in CCUS/RNG and other renewable fuels; not to mention the $1.2tn infrastructure bill signed into law just this week. The ecosystem of capital providers continues to evolve capital is being deployed into wide-ranging segments far beyond just energy production.

Joint effort will unlock greater emissions reductions by enabling renewable PPAs to target grid regions where clean energy can displace more fossil-fueled emissions

GreenFront’s market update is way of helping readers to stay up to speed on topics like M&A, Capital Markets, Project Development, ESG, and Corporate PPA Activity.

We cover companies and activity across the AE value chain, with a focus on Wind, Solar, Storage, Renewable Natural Gas (RNG), Carbon Capture & Sequestration (CCS), Hydrogen, and Cleantech.

Greenbacker’s Strategic Investment Will Support a 1-Gigawatt Pipeline of Solar and Storage Projects in the Commonwealth of Virginia