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Six Takeaways from Wind Turbine Vendor Update: A Conversation with GE Renewable Energy


McDermott hosted GE Renewable Energy North America Services Sales Leader Ben Stafford, Commercial Director of Onshore Wind for the North Region Rob Bienick and Commercial Director of Onshore Wind for the West Region Matt Lynch on July 30 for a discussion about COVID-19’s impact to turbine supply chain and construction, the effects of the Production Tax Credit (PTC) safe harbor extension, and how GE is preparing for 2021 and beyond.

Below are key takeaways from this week’s webinar.

1. COVID-19 continues to impact both supply chain and construction – requiring more communication with customers, subcontractors, and within GE, but products continue to be manufactured, delivered, installed, and maintained.

2. The large wind project pipeline in the United States (even prior to the PTC extension) shows that there remains great optimism for the wind industry, despite the current PTC phase-out schedule.

3. The repowering market for wind is growing, providing many benefits including renewed PTCs, increased energy yield, increased reliability, lowered maintenance cost, and optimization of existing site infrastructure over greenfield development.

4. The trend toward longer blades continues, but logistics remain the largest hurdle to wider deployment.

5. Service agreements are trending towards longer terms with greater flexibility to meet customer needs, including opportunities to align interests with revenue and risk sharing terms.

6. GE is available to support both new and repowering projects with available safe-harbor equipment.

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Access past webinars in this series.




Final Regulations Define ‘Real Property’ for REITs: Considerations for Renewable Energy and Transmission Assets

On August 31, 2016, the Internal Revenue Service (IRS) and US Department of the Treasury issued final regulations (Final Regulations) under section 856 of the Internal Revenue Code to clarify the definition of “real property” for purposes of sections 856 through 859 relating to real estate investment trusts (REITs). The Final Regulations largely follow proposed regulations issued in 2014 (Proposed Regulations) by providing a safe harbor list of assets and establishing facts and circumstances tests to analyze other assets.

Read the full article.




What Must Be Done for Wind and Solar Projects to Have “Begun Construction” under the New PTC and ITC?

With the recent extension of the federal income tax credits available for renewable energy projects, practitioners and industry participants have raised questions as to how the “begun construction” rules will apply under these new regimes.  The new regimes refer to the dates on which construction on projects began for purposes of determining qualification for the credits and also provide for a phaseout or reduction in the available credits over time. (For more information on these extensions, see our previous article on the extensions.)

Industry participants expect that the Internal Revenue Service will soon issue guidance detailing when a project will be determined to have “begun construction” and when continuous construction efforts are required.  It is expected that this guidance will be similar to the beginning of construction guidance summarized here for wind projects.  However, in light of the different considerations for different technologies and the reduction in the credit amount over time, which differs from the prior credit for wind that expired in its entirety, a number of questions have been raised by industry participants.  It is hoped that some of these questions will be answered by any guidance that is issued with respect to the credit extensions.  Some of these questions include:

  • Will the beginning of construction tests be the same as they currently are for wind (e., a physical work of a significant nature test and a 5 percent safe harbor test)?
  • Will continuous construction efforts be required under the new regimes?
  • What is the consequence of failing to maintain a program of continuous construction? Will the project still be eligible for a reduced credit, and how will that credit amount be determined?
  • Will there be a placed in service safe harbor? The wind guidance had provided that continuous construction efforts would be considered maintained so long as projects were placed in service prior to a specific date.  That date was two years after the end of the year in which the project was required to be placed in service.  Most industry participants believe this safe harbor will be extended to apply to wind projects beginning construction through 2016.
  • If there is a placed in service “safe harbor,” will it apply to all technologies in the same manner? That is, will the safe harbor period be the same for all renewable technologies?
  • Will the guidance address and provide examples of “physical work of a significant nature” for solar projects?
  • How would the physical work and safe harbor tests apply in the context of residential or commercial and industrial solar projects?
  • In the solar context, what will be considered a single “facility” for purposes of the beginning of construction tests?

We will provide additional updates as we get more information, so please stay tuned.




Using the Bankruptcy Code “Safe Harbors”

by Iskender “Alex” H. Catto and Gregory Kopacz

Energy bankruptcies can be rich in opportunity for potential debtors, creditors and distressed-asset purchasers. Failing to understand the “safe harbors” of the bankruptcy code can lead to the evaporation of value, lost opportunity and potential severe disruption to a company’s operations. But, when properly understood, utilizing the safe harbors can be an effective tool in preserving value and mitigating risk.

Click here to read the full article.

This article was originally published in Daily Bankruptcy Review on July 10, 2013.




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