NRG Backs Carbon Tax Amid Effort to Sell Clean-Energy Operations

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  • Renewable energy will remain part of U.S. power industry
  • ‘We’re not the lowest cost of capital in the market,’ CEO says

Just because NRG Energy Inc., the owner of almost 9 gigawatts of coal-fired power, is working to sell its renewables businesses doesn’t mean it’s giving up on clean energy.

Chief Executive Officer Mauricio Gutierrez supports imposing a price on carbon. And even if NRG unloads its wind and solar farms and its renewables-development operations, the company will continue making renewables products available to its nearly three million retail customers.

“It would be almost disingenuous to think that renewables are not going to be part of the power industry in the future,” Gutierrez said in an interview Wednesday at Bloomberg’s New York headquarters. 

“The question is not whether we support renewables,” he said. “The question is how.”

After a companywide cost-cutting review triggered earlier this year by activist investors Paul Singer and C. John Wilder, NRG determined that it’s not best-positioned to be a vertically integrated developer, builder, operator and owner of wind and solar farms. That’s why the company is looking to sell at least 50 percent of its interest in NRG Yield Inc., which holds renewable assets. 

“We’re not the lowest cost of capital in the market today,” Gutierrez said. “I cannot look in the mirror and say we are.”

It’s a good time for sellers of clean-energy assets. They’re finding a large and growing pool of institutional investors, including pension funds and insurance companies, hungry for operating wind and solar farms that sell their output under long-term utility contracts.

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NRG owns almost 5 gigawatts of wind and solar farms, including the assets of NRG Yield, the yieldco it created and controls.

Even if NRG sells all of its renewable-energy assets, Gutierrez said the company stands by its existing sustainability objectives -- cutting carbon emissions from power plants 50 percent by 2030 and 90 percent by 2050. And NRG wants a price on carbon, in part because it could increase revenues for its gas-fired power plants.

“You are actually pricing an externality,” Gutierrez said. “Isn’t that what we all want in an economic system?”

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