winter is HERE

Originally Written December 13, 2025

Last year, we warned that Winter was Coming for renewable developers. Few truly believed how fast and how cold it would get. The market tightening we now face is not an abstract chill—it’s a deep freeze affecting valuations, liquidity, and investor appetite across the sector.

Capital hasn’t vanished, but its mood has changed. Money now seeks safety first and returns second. Projects near Notice-to-Proceed remain saleable, though at higher discount rates than most developers would like. The key word, as we wrote then, is reasonable—reasonable prices, reasonable expectations, reasonable urgency. In volatile conditions, small delays can turn costly as windows of opportunity close overnight.

We urged developers to value liquidity above all else. Scrutinize every dollar. Scale back or abandon projects that don’t meet higher thresholds for return and timing. Most importantly, plan for a reality where project sales volumes and valuations no longer resemble the buoyant markets of the past. Companies rarely fail for lack of assets—they fail because they adjust too late.

We are now witnessing the consequences of that hesitation. Over 45 gigawatts of renewable projects are on the market for sale, yet many historically active buyers—European strategics like EDF, Engie, RWE, Ørsted, and EDPR, Canadian pension funds such as Ontario Teachers, CPPIB, and AIMCo, even Oil Majors like BP and Shell—have largely stepped back. Meanwhile, many sellers refuse to sell, waiting for better days that might not come. The result? A gridlocked market.

So where are the buyers? Private equity and infrastructure funds are circling, but they’re not chasing growth—they’re waiting for distress. Not distressed assets, but distressed sellers. The balance of power has shifted. As the renewable market has grown, sponsors and asset owners have outgrown demand, shrinking the pool of credible buyers. Today, there may be only 10–20 serious buyers for renewable platforms worth over $1 billion, and fewer still for anything larger. It’s no wonder that billion-dollar trades have all but disappeared.

For some, public markets may be the only path forward. Companies like Intersect Power might ultimately find their next chapter in an IPO—or perhaps through acquisition by hyperscalers like Google or Amazon, whose hunger for large-scale, long-term power for data centers continues to grow. These buyers value cash flow longevity, not just near-term returns.

Others are finding creative ways to adapt. Consider Longroad Energy’s approach: build with equity, then sell down minority or majority stakes to long-duration investors like insurers. It’s a liquidity strategy refined by European players like EDPR—accepting smaller but higher-yielding equity positions to stay nimble and funded. Still, even sell-downs are not immune to today’s market chill.

And then there’s the hard lesson many are learning about their capital stacks. Credit providers are exactly that—credit providers. When things turn south, they survive; sponsors often don’t. The Pine Gate example lingers as a warning: structure your financing for resilience, not just speed.

Now is the moment for every developer, sponsor, and owner to revisit their strategy—and their assumptions. Liquidity, discipline, and speed of decision-making are the tools that will determine who makes it through this winter and who doesn’t.

The thaw will come—but it will favor those who stayed awake through the cold. Those who plan now, secure the right capital, and move decisively will find themselves not merely surviving, but poised to lead when spring finally returns to the renewable markets.

As professionals working in this space for over 20 years, not only as investment bankers, but as one of the largest owners to scale a renewable energy platform, please feel to reach out.  XIP was built for this purpose and you will get the benefit of our team’s nearly 50 years or more of combined experience.