Renewable Energy

Sanabe came to the renewable energy sector through our work with several paper producers. Many paper and wood products companies generate electricity at hydroelectric and cogeneration facilities for internal consumption and/or sale to third parties. Several of these companies have found that separating and monetizing their hydroelectric assets was an attractive way to maximize value. Companies in these sectors are also seeking to leverage their central position in wood fiber markets to participate in biomass electricity and advanced biofuel projects.

Sanabe has developed a renewable energy practice to respond to these opportunities and to leverage the market knowledge gained from these assignments to assist all types of renewable energy and power companies.

Market conditions are favorable for renewable energy suppliers due to:

• Government policies to move away from fossil fuels including renewable fuel and electricity standards, tax incentives and direct construction subsidies
• Private sector demand for renewable energy to support environmental marketing
• Stable underlying demand for power and the availability of long-term purchase agreements

As a result, renewable energy facilities are attracting increased interest from several types of investors:

• Local regulated utilities
• Independent power producers
• Energy-oriented financial sponsors
• Publicly traded renewable-oriented companies

The strong investor interest creates a range of opportunities:

• Sales of hydroelectric and other renewable power facilities at attractive valuations
• Conversion of former manufacturing sites to bioenergy facilities
• Attract JV partners or direct investment for bioenergy projects at operating paper and wood manufacturing facilities
• Development of greenfield renewable power projects

Our approach to these assignments includes:

• Detailed knowledge of the industry, including an understanding of the key operating metrics that drive valuation
• A proprietary data base that relates hydroelectric facility capacity, river flow and utilization rates to ultimate value
• Understanding key regulatory dynamics
• Understanding the detailed financial results of our clients, particularly an ability to deconsolidate a mill's operations between its pulp/paper and energy components
• Up-to-date knowledge of those seeking to invest in the industry and multiples paid for renewable energy facilities

Please view the following case studies:

• NewPage Little Quinnesec Hydroelectric Facility
• Synergics Energy Services Hydroelectric Assets