Infratil upbeat about US renewable energy despite Trump uncertainty

Infratil CEO Marko Bogoievski

Related audio: Infratil CEO Marko Bogoievski on the company's investment plans (Nov 14)

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Infrastructure investor Infratil is still upbeat about its investment in US renewable energy development company Longroad Energy Holdings despite President Donald Trump's election promises to promote coal.

While Infratil said the company's progress has been overshadowed by the potential impact of Mr Trump's promises, "the president's comments about each of coal, gas and renewables are inconsistent, making outcomes hard to anticipate."

In a market update to the New Zealand stock exchange, it noted that ,while there is no way of knowing how federal and state policies, the rising cost of coal mining, the falling cost of gas, and improving renewable plant economics will play out, there are also political, societal and commercial factors that make it extremely unlikely that the US will suddenly stop building renewable generation.

"There will be headwinds but the ship is unlikely to sink," it said.

The US situation is "hardly ideal" for Longroad's plans to develop but Infratil said its business model is suited to dealing with uncertainty.

Infratil and the NZ Superannuation Fund teamed up with a local management team to invest in Longroad in October last year. At the time it said the investment gives the Kiwi team exposure to one of the largest and fastest-growing renewable markets in the world, with an experienced US management team previously involved in First Wind, which Infratil said was one of the most successful independent renewable energy development teams in the US over the past decade.

It said today that shareholders have jointly agreed to provide initial funding of $US100 million and Infratil's share is $65 million. Since October, Longroad has announced the purchase of a portfolio of early stage solar development projects across several states, as well as the purchase of wind turbines which will be deployed as developments become available.

Infratil shares last traded up 0.4% at $2.875.


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I can only conclude that they have not done their homework properly.

Renewable energy in the USA survives entirely on subsidies paid by the consumer because the government has been misled into believing that wind and solar power are a cheap way of reducing carbon dioxide emissions. They are not. In fact, they almost certainly increase carbon dioxide emissions because the price uncertainties brought on by intermittent and unpredictable wind and solar power are making nuclear power stations uneconomic and hence they are being shut down. To a large extent, their place is being taken by open cycle gas turbines that are needed to respond rapidly when the wind doesn't blow or the sun doesn't shine.

If Infratil looked a bit deeper into the matter, they would discover that, contrary to what they have been told, the world is not warming rapidly – between 1998 and 2016 it warmed by 0.2° per century. This proves that man-made carbon dioxide does not cause dangerous global warming.

Therefore consumers, governments and developers spending money on renewable energy are involved in a futile and expensive effort to solve a non-existent problem.

Any business that relies on subsidies from a Trump government is high risk. Any business that relies on misinformation is also at risk.

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That's one perspective. Another is that solar and wind cost per kWh is declining at an accelerating rate. Some of the savviest investors in the world are investing heavily into renewables on the premise that they are competitive with non renewable without subsidies. This includes Berkshire Hathaway's Mid-American. Perhaps it is best we let time prove this one out.

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Just look at South Australia for some proof of how solar & wind are not that great.Rolling blackouts planned at the moment .

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Charlie, can you provide any hard evidence that, once the cost of backup, frequency control and transmission is included in the equation, wind and solar are anywhere near competitive with conventional power stations that provide power when it is needed?'s

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