Utility scale solar trends:
Energy market innovation in renewables + storage compete with conventional power.
Vistra Energy (Ba2) announced close of 3.5 GW coal-fired power located in TX. Current ERCOT peak power price $0.03-0.034/kWh. ERCOT has 1.9 GW mothballed power projects that could be restarted.
City of Gainesville acquires $757 MM biomass power project. Exits 30-year PPA.
Thermal power share of generation expected to be above 60% in 2026.
Oil & Gas
Market expects Henry Hub natural gas price to be between $2.50–$3/MMBTU in 2017. Expect price increase up to $3.50/MMBtu through 2020.
Support for MLPs to finance energy assets and to extend PTC beyond 2020. Aramark $2.35 BN acquisition of Avendra @ 5x Debt/EBITDA. Research Now Group merged with WWC combined 5.3x Debt/EBITDA. Slow down in early stage investing. Lowest level in 5 years. Air pollution contributed to 6.5 MM deaths in 2015, water pollution 1.8 MM and workplace-related pollution 0.8 MM deaths. Morgan Stanley suggests that slower declines in the velocity of money are pointing to higher inflation ahead. US economic confidence remains elevated but has come off the highs. Moody’s decline in the number of “stressed” credits. NRDC annual energy report renewable energy targets ahead of schedule. DOE Grid Resiliency Pricing Rule could have a major impact on industry and markets.