BERLIN: NRG Energy Inc.’s decision to create a new unit for renewable energy operations should look familiar to anyone who’s been watching the utility industry in Europe.
NRG realized it’s difficult to manage renewable energy and conventional power –- increasingly different businesses -– under the same umbrella. Germany’s largest utility EON SE reached the same conclusion last year.
“There’s a big trend throughout the market: we don’t like conglomerate-type companies,” said Kit Konolige, a senior utility analyst at Bloomberg Intelligence in New York.
NRG said Friday it will create a renewable energy unit called GreenCo, and may sell a majority stake. GreenCo will be fast-growing and cash-consuming, Konolige said, while the so-called “OldCo is mature and not growing very fast, if at all.”
NRG has two very different business lines, “basically, old energy and new energy,” Konolige said. “I think they found their investors saying to them, ‘We’d rather invest in old energy or in new energy, but not both at the same time.’”
