D.E. Shaw keen on SunEdison's 148 MW Hawaii solar projects

Three SunEdison solar farms built in Hawaii but left without a buyer for their electricity after the local utility pulled the plug on the purchase contract are piquing the interest of New York-based hedge fund D.E. Shaw.

Hawaiian Electric Co. in February terminated three power purchase agreements (PPAs) for the solar projects, citing SunEdison’s precarious financial position as a deterrent. But as questions abound in relation to the U.S. clean energy developer’s liquidity, D.E. Shaw is eager to find a "commercially reasonable solution" to re-igniting the PPA deals, according to a letter the hedge fund submitted to Hawaiian Electric last week.

The Hawaii utility’s reasons for canceling the deal were rooted in concerns over SunEdison’s financial troubles – which recently included the collapse of a merger and acquisition deal to purchase Vivint Solar – whereas D.E. Shaw’s interest is a reflection of the projects’ actual worth.

The solar farms in question include the 65 MW Kawailoa plant, the 64 MW Waipio plant and the 19 MW Mililani II solar farm.

According to D.E. Shaw MD Bryan Martin, Hawaiian Electric did not have confidence in SunEdison’s ability to "perform as the projects’ sponsor", a concern, he believes, is alleviated if the D.E. Shaw group is permitted to purchase the projects outright.

However, according to Bloomberg, there remains some reservation within Hawaiian Electric over the nature of D.E. Shaw’s interest. "We remain concerned that D.E. Shaw is a creditor of SunEdison and is trying to acquire the solar contracts to help settle that debt," said Hawaiian Electric spokesperson Darren Pai. "Should SunEdison later go into bankruptcy, as many financial media outlets are speculating, those projects could be tied up in a fight amongst creditors for a long time."

SunEdison’s response, reported by Bloomberg, has been to reiterate its belief that the company remains committed to selling and supporting the completion of the three projects. "These solar power plants would increase solar capacity on Oahu by nearly 30% this year, supplying more than 100 MW of clean energy to help Hawaii meet its 100% renewable portfolio standards and reduce exposure to fuel price volatility," he said. "We continue to believe this is the best outcome for ratepayers and for Hawaii’s renewable energy goals"

Despite SunEdison’s precarious financial position, the cancelation by Hawaiian Electric did not harm the agreement with D.E. Shaw to acquire these projects – and others – in exchange for writing off a portion of the renewable energy firm’s debt.