Leyline 2023 Year in Review

Another year has flown by, and Leyline Renewable Capital was busier than ever. In 2023, we remained dedicated to our goal of financing climate-friendly renewables and engaged with clean energy experts across the United States and globe. We were excited to close almost ten new loan commitments, speak at numerous conferences, and continue advancing our focus on justice, equity, diversity, and inclusion (JEDI) both internally and through our projects.

‍

Development Capital Loans

‍

This year, the clean energy development landscape reacted to several trends. First, the Inflation Reduction Act (IRA) stand-alone energy storage investment tax credit (ITC) put energy storage on a level playing field with other clean energy technologies. This ITC credit made battery energy storage systems economically viable across the United States and we saw stand-alone battery energy storage developers use the ITC to launch their own companies. Leyline provided development capital to several of these developers. Second, the clogged interconnection queues shifted developer behavior toward distributed energy projects. Developers had less interest in projects in RTOs with long interconnection queue wait times (as long as four years) and instead sought out distributed energy opportunities as one way to do projects and bypass the interconnection waiting game.

‍

Against this backdrop of national trends, Leyline provided over $125 million in development capital loans and used a full suite of lending tools to assist developers across all stages of the project process. This year, we supported a number of new loan clients: RAI Energy, Grid Connected Infrastructure, LLC, Westbridge Renewable Energy Corporation, Accelergen Energy, Highline Renewables, LLC, Caerus Commodities, Navitas Energy, and BESS Power Corporation. Below is a list of each company and how they plan to utilize our development capital loans to realize their vision.  

‍

• RAI Energy focuses on utility-scale renewable energy projects in western markets. Leyline’s Development Capital will help the company advance their mission to achieve a sustainable, zero-carbon future, supporting multiple gigawatts of additions to their existing 750+ megawatt distributed generation and energy storage portfolio. 
• GCI aims to develop more than a gigawatt of battery energy storage system capacity (BESS) through 2027. Leyline’s Growth Capital will launch GCI’s greenfield project development and support large-scale energy storage expansion.
• Westbridge Renewable Energy Corporation develops utility-scale solar PV projects in Canada, the United States, and the United Kingdom. Leyline partnered to provide multiple loan agreements to fund a pipeline of solar and BESS projects in Alberta.
• Acclergen Energy focuses on greenfield utility-scale solar, solar plus storage, and standalone storage projects that benefit local communities. Leyline’s Growth Capital product will finance Accelergen’s multi-gigawatt portfolio of zero-carbon energy projects across the U.S. over the next four years.
• Highline Renewables specializes in developing distributed generation and community solar projects in both established and emerging markets. A Growth Capital loan from Leyline will support new initiatives in the ERCOT and PJM energy markets. 
• Caerus Commodities works to support the energy transition as an energy trading merchant and asset investor. Leyline’s Growth Capital will support renewable asset development in the ERCOT and Alberta, Canada markets. 
• Navitas Energy, an energy storage developer in Texas, upsized its Leyline Growth Capital loan to expand standalone storage projects in the ERCOT energy market.
• BESS Power Corporation, a greenfield utility-scale energy storage developer, will use Leyline’s Growth Capital product to accelerate development of a multiple GW standalone storage project pipeline. 

‍

We had multiple loans in economically disadvantaged communities. For example, in the third quarter of 2023 two projects were constructed in economically disadvantaged communities - the first benefiting a community designated as low-to-moderate income (LMI) and the second in an Opportunity Zone (OZ) identified by census tracts. In the fourth quarter of this year, Leyline had eight loans within LMI areas and one in an OZ. Leyline places JEDI front and center of our work.

‍

Events and Speaking Opportunities

The year 2023 also included a full schedule of conference presentations and opportunities to connect with clean energy thought leaders across the United States. 

‍

• Todd Kice, Managing Director of Originations spoke at the Infocast’s Projects & Money conference: In “Investors’ Perspectives on the Market,” Kice and other panelists discussed everything from perceived challenges and evolving risk appetites to the Inflation Reduction Act (IRA)’s investment impacts. Kice also spoke on the Large Scale Solar USA Summit’s panel “Solar vs Macros.”
• Vipul Devluk, Director of Investment Origination, spoke at Energy Storage USA in Austin. His panel, “The Rise of the Underdog,” examined what’s next for energy markets as certain areas grow saturated, and discussed what developers and investors must consider when expanding their horizons.
• Erica Reidy, Director of Investments, presented at the WRISE Leadership Forum in Minneapolist. Her session, "Accelerating Climate Finance,” discussed implementation of the IRA, cost of capital changes, potential impacts of bank framework Basel III, supply chain financing challenges, and FERC Order 2023.
• Eric Rubinstein, EVP and Chief Investment Officer, presented in Houston at Infocast’s Tax Incentives 2023. His panel discussed new tax transferability provisions in the IRA and how developers and investors can take advantage of benefits on the secondary market.
• Daniel Copple, Director of Technical Services, offered comments at our webinar “Interconnection in PJM.” Copple and other speakers provided an overview of PJM models, interconnection requirements, FERC changes, and more.
• Erik Lensch, our CEO, presented at the North Carolina Sustainable Energy Association’s Making Energy Work conference. The panel, "Hitting NC's Carbon Reduction Mandates: Costs, Timing, and Business Model of New Generation," provided targeted advice for developers navigating North Carolina’s decarbonization priorities. 

‍

Justice, Equity, Diversity, and Inclusion

‍

This year saw active incorporation of JEDI tracking into the Leyline loan process. Internally, we were excited to revamp and finalize new environmental, social, and governance (ESG) metrics to ensure that our reporting is accurate to the story we tell and information we share. Throughout the year, JEDI Manager Kiah Glenn led our staff in various JEDI training workshops, to increase company knowledge around diversity, equity, and inclusion (DEI). Kiah additionally co-led an internal workshop for Renewables Forward members who work in the DEI space. This workshop aimed to help DEI practitioners find community with others who share the same work, discuss issues, provide support, and identify areas of success.

‍

We were also pleased to host a great 2023 cohort for our REEAL program. REEAL is a 27‐week rotational internship designed to allow motivated and hardworking undergraduate students to take their classroom learning into the real world. REEAL student externs/interns gain valuable insight into and direct experience in the many facets of the renewable energy industry and Leyline’s financing for green energy projects. Our vision is to develop future professionals in renewable energy who have a broad, integrated understanding of this critical field and are inspired to lead its continued impact.

‍

Leyline continues to actively engage with our community, from working with the local food bank and participating in Habitat for Humanity builds, to donating to refugee families and providing them with essential technologies and culturally-specific resources. 

‍

Our CEO Erik Lensch also serves on the board of the Sustainability, Entrepreneurship, and Empowerment Network (SEEN). This engagement is part of our community outreach strategy to promote the JEDI narrative. SEEN aims to facilitate access to networks, capital, and expertise that support the entrepreneurial dreams of Black and BIPOC students pursuing a more sustainable world. Its flagship program, with a first cohort beginning in fall 2024, will be a year-long paid, rotation based program that will serve as a business and entrepreneurship incubator for students based at Historically Black Colleges and Universities (HBCUs). SEEN also fosters building relationships with key industry leaders, and was excited to gather bright minds at its first sustainability Roundtable Event this year. 

‍

2024 Priorities

‍

In 2024, Leyline will focus on its current commitments and work closely with developers to advance their projects. As former developers, we know the development process and we want our developers to be successful. To that end, we will be paying close attention to project execution. 

‍

We expect to continue seeing energy storage as the priority technology over the next three years and data bears that out. A recent study shows 43 percent of respondents noting that their organization will invest in energy storage between 2024-2026. Additionally, we expect to see smaller development projects, given the long interconnection queues and continued permitting challenges. 

‍

Several trends have become less worrisome such as supply chain delays, as companies have shifted their supply chains. IRA investment in domestic manufacturing has geared up, making the industry less dependent on China for solar modules. This year solar module prices reached a two year low and lithium ion battery prices fell 14 percent compared to 2022. That said, interest rates remain high, impacting the cost of capital somewhat bolstered by higher power purchase agreement (PPA) prices. 

‍

Although the ecosystem surrounding developers in 2024 will not be “settled” or “predictable,” Leyline remains a trusted financial lender for developers in this turbulent environment. Our history bears this out and we expect 2024 to be no different.