Wednesday, March 26, 2008

AES and Riverstone also go Big on Solar

Yet another wealth fund and energy company are pairing up to build utility-scale solar power plants. A hint of deja vu (see earlier post on the Torresol joint-venture)? Global diversified energy giant and Virginia-based AES and New York private equity firm Riverstone, an affiliate of the Carlyle Group are forming a joint venture in the name of AES Solar. AES and Riverstone will each "provide up to $500 million of capital over five years to invest in PV solar projects around the world, ranging from fewer than two to more than 50 megawatts in size."

In my view, this is a significant announcement. What sets this venture apart from the Torresol venture is that AES and Carlyle are both powerhouses in their respective industries of energy (although much has been made of AES' sustainability push, they have traditionally been, and still are, very much vested in fossil fuels) and private equity and very much represent the status quo. As this Washington Post article notes, this investment represents AES's first venture into solar. For the two giants to come together and make a billion dollar bet on big solar is a major validation on the outlook of the role utility-scale solar will play in our global energy mix.

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