ESG & Investing
PE Firms Look to Cut Losses After Renewable Energy Bets Fizzle
- Startup models don’t work in early stages without subsidies
- Valuations marked down from era when enthusiasm was overcooked
Institutions such as pension funds covet wind and solar farms already in operation because the stable income from lengthy power-supply contracts matches with investors’ long-dated liabilities.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Private equity firms face a sober reckoning on their renewable energy bets. Simply put, a lot of those startups aren’t worth nearly what their sponsors paid for them, and some of those zero-emission ventures are just plain zeroes.
It’s a reality check for investors such as BlackRock Inc., Riverstone Holdings and Canada’s Caisse de Depot et Placement du Quebec. They’re finding the buzzy startups they chose just a few years ago in wind and solar energy, electric vehicles and other environmentally friendly fields don’t make money on their own.