According to a September 22nd Wall Street Journal Article, Quantum Energy Partners, an energy firm run out of Houston, Texas, is starting a new company called Quantum Utility Generation LLC. The new energy company is to be run by Larry Kellerman who now works for a power generation company owned by Goldman Sachs. Quantum Energy Partners is collecting $500 million from investors and raising $500 million of its own funds to start this project. In doing this, they are entering the market of asset deals when prices are low. A market of asset deals is where assets like power plants are bought. This lull in the market exists because there is a lot of shifting going on in this part of the industry. As the article states, sellers are trying to get out of the business quickly and buyers are trying to acquire facilities like power plants for low prices. To emphasize this point, in the last month and a half PPL Corp. decided to sell plants to LS Power and Blackstone Group LP bought Dynegy Incorporated. All of these are major acquisitions.
This might seem like an unimportant article about another acquisition, but the interesting part is Quantum Energy Partners’ goal. They believe that coal power plants are on the way out because of increased environmental regulation. Therefore, they plan to build newer, more efficient, natural gas, solar, and wind plants. This could represent a new trend for the power production industry. Companies will have no choice but to begin investing in cleaner technologies when the government makes the old, less efficient ones much more expensive.
In many cases I would be happy to see this sort of article. I am pleased that Quantum Energy is taking a risk by going into this market and I like that they are investing in cleaner energy. However, I do not like that their motivation seems only to be government policy. The article states that they are going into cleaner energy because states are enacting clean energy requirements that will promote solar and wind. Yes, there should be incentives to move into newer technologies, but I would prefer the government taking a more passive role in this regard. That is not to say that they should step out. But it does not seem right that any sort of government determines which technologies are developed in such an important industry, especially when there are such strong options as nuclear power.
Peters, Mark. "Quantum Energy to Form New Company." Wall Street Journal (2010): Web. 22 Sep 2010.
http://online.wsj.com/article/SB10001424052748704129204575506000363635496.html?mod=WSJ_Energy_leftHeadlines
This seems like quite the project to hit the industry. I feel it will have a large impact on the energy industry as a whole. They seem to have a solid plan and I do applaud the movement towards clean energies. It does seem like they are using the government policies as a pawn of a game but after all, that is business. However, I don't agree with you on your last statement regarding nuclear power. I see it as a good thing that companies are looking to cleaner energy, and I am for the enlargement of the solar and wind sectors of the industry. Nonetheless, no matter which method they choose, I'm glad it's a choice of cleaner energies.
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