Even the Man Who Tried to Turn NRG Green Backs Elliott

David Crane spent five years trying to convince Wall Street that he needed to turn the coal-burning, natural gas-dependent power generator NRG Energy Inc. into a clean-energy company.

The crusade ultimately cost him his job. In late 2015, after NRG’s debt had swelled to $20 billion, Crane was fired as chief executive officer of the nation’s largest independent power producer. His rooftop solar business was shelved. And in case it wasn’t clear enough where investors stood on the “green” image he was building: NRG, facing pressure from billionaire Paul Singer’s Elliott Management Corp., said Wednesday that it would seek a buyer for the unit Crane created primarily to run solar and wind farms as part of a plan to divest as much as $4 billion of assets.

In a testament to how unattractive investors have found NRG’s green ambitions, even Crane thinks the idea of selling the renewables business is for the best. At this point, he said, it’s clear: Wall Street has no interest in a company that mixes fossil fuels with clean energy.

“Nobody really cared about the green business,” he said in an interview Wednesday. After a sale, NRG won’t have “a single pillar of green left in them” and the renewables business will be better off because it’s “big enough to stand on its own,” he said.

To be sure, Mauricio Gutierrez, Crane’s replacement at NRG, stressed during a call Wednesday that the company may keep a 50 percent stake in the renewables unit NRG Yield Inc., and fell short of saying he’d end clean energy investments. NRG’s head of sustainability, Bruno Sarda, said in a statement that the company remains committed to “sustainability strategy and goals, including our ambitious climate targets.”

Meanwhile, Wall Street has already moved past the image of NRG tearing off the green label and is now talking takeover bids for the so-called yieldco, a publicly traded company that owns operating wind and solar farms.

If there was any single development that contributed most to the ultimate death of that green image, it was Elliott taking an activist stake in the company with turnaround titan C. John Wilder’s Bluescape Energy Partners. The two pressed NRG in February to begin the business review that ultimately led to the company’s decision to seek buyers for the yieldco.

“Wilder is a conventional-generation guy,” said Stacy Nemeroff, a utilities analyst for Bloomberg Intelligence. He and Elliott “aren’t that interested in the green-diversification story.” Bluescape and Elliott didn’t immediately respond to requests for comment.

Crane said Wednesday that the big flaw in his plan to turn NRG green was that the company was essentially cut off from clean-energy institutional investors that couldn’t invest in a generator that made most of its money off coal plants.

“It has much more opportunity for success outside NRG than inside,” he said.

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