Market Insights

# Renewable Energy M&A Slows From 2021 Highs

September 26, 2022 by Shannon Cuthrell

## After a banner year in 2021, renewable energy mergers and acquisitions appear to have slowed. Here are some of the trends leading today’s M&A landscape.

Here, we’ll profile some of the most notable trends dominating today’s environment for mergers and acquisitions in the renewable energy space.

### Mergers and Acquisitions in 2021

Before unpacking the latest trends around renewables, let’s consider the broader context: Across most industries, global M&As reached an unprecedented high in 2021, thanks to low interest rates, easy access to capital and the post-COVID turnaround. Mega-deals remain historically high in 2022, but recent volatility sent global M&A volume plummeting by 26% in the second quarter, per data from PitchBook. Corporate merger announcements have also slowed.

### Energy Storage and EV M&A Down

According to S&P Global Market Intelligence, global M&As of energy storage and EV companies plummeted to $7.7 billion as of August (down from$81.8 billion in 2021 and $31.4 billion in 2020). The electric vehicle market was hit particularly hard due to a sharp decline in special purpose acquisition company (SPAC) deals, which had been a major trend in 2021 as EE Power covered with players such as Solid Power and Navitas Semiconductor (both valued at over$1 billion).

Still, this year has seen some notable SPAC activity so far. One was a $288 million reverse merger between Novus Capital Corp II and grid-scale energy provider Energy Vault, with the latter going public on the New York Stock Exchange last February. Another involved SES, a leader in high-performance lithium-metal rechargeable EV batteries that was acquired by Ivanhoe Capital Acquisition Corp in February. The deal would help build more partnerships with top automakers to expand SES’s li-metal battery supply. SES has joint development agreements with several major car brands, including General Motors, Hyundai and Honda. Combining hardware and software, the company offers products through three development tracks: A platform for new material development, engineering for large automotive cells and safety software to monitor battery health. ### Oil and Gas Production M&A Meanwhile, renewable energy’s counterparts in the oil and gas market are seeing high levels of dealmaking, according to PitchBook, primarily due to industry consolidation and cash from high energy prices. Many are using M&As to expand their renewable assets and production capacity. Aiming to broaden its U.S. footprint, French oil giant TotalEnergies acquired SunPower Corp.’s commercial and industrial solutions unit in February for$250 million. The deal will help TotalEnergies add over 100 megawatts of capacity per year, assisting with its target of adding 4 gigawatts of solar by 2025.

In June, oil giant Chevron acquired Iowa-based biofuel producer Renewable Energy Group for \$3.15 billion in a bid to transition the company into one of the leading renewable fuels providers in the U.S. Chevron said the deal would help expand its renewable fuels business and reach its target of 100,000 barrels per day of renewable fuels production capacity by 2030. The company said combining Renewable Energy Group’s feedstock capabilities with its fuel distribution network would help it become a leader in alternative fuels.

Featured image used courtesy of Adobe Stock