WUEG February 2016 Newsletter

whartonundergradenergy

February 2016

Billionaire David Tepper also tried to sue

SunEdison, and his dispute was over the

acquisition of Vivint Solar. Tepper’s company,

Appaloosa Management holds a 10% stake in

SunEdison’s yieldco, TerraForm Power. In the deal

to purchase Vivint Solar, TerraForm Power would

contribute $799 million of the $840.6 million

necessary to make the purchase, and Tepper

believed that this would be unfair to the

shareholders of TerraForm Power. Although

Tepper did not win his lawsuit, he did create

uncertainty in SunEdison’s shareholders, causing

the stock price to drop.

In fact, the deal with Vivint Solar was one of the

key events that sent SunEdison’s stock

plummeting. Last summer, as SunEdison was

peaking in its stock price, it attempted to close the

deal with Vivint Solar, but didn’t seem to have

enough capital to do so. This worried investors,

and the stock price began to plummet. The Vivint

Solar trade still hasn’t gone through, and even if

SunEdison does make the acquisition, there is no

guarantee that SunEdison will be in the clear.

SunEdison expanded too aggressively, and now it’s

facing the consequences. They only have $619

million in cash, and large amounts of projects,

amounting to nearly 2.9GW of energy, that still

require investment to be completed. SunEdison’s

struggles come in contrast to the rest of the solar

industry, where most investors are optimistic as a

result of America’s pledge to reduce emissions by

28% by 2025. SunEdison may have bit off more

than it can chew, and even if they get past all of

their lawsuits, they may be done for good.

Sources:

Fortune

MIT Technology Review

Wall Street Journal

Seeking Alpha

Ukraine’s Energy Grid Hack Renews Cybersecurity Fears

José Del Solar – Member, Academic Committee

Just before Christmas, hackers took down almost a

quarter of Ukraine’s power grid, jamming the

power companies’ phone lines so when customers

called to complain they got nothing but busy

signals. The hackers also sabotaged its

management systems, forcing workers to

physically go to the generators and manually close

breakers that the hackers had remotely opened.

Indeed, the power was back up in a matter of

hours, but the event rekindled fears about the

frightening havoc that power grid cyber-attacks

can wreak.

In 2007, the U.S. government demonstrated how a

power plant generator could be destroyed with

just 21 lines of code by running it hotter than

normal. Admittedly, this would be more difficult

than it sounds, as hackers would likely need to

discover flaws in the systems the power companies

themselves don’t know exist before they could

exploit them. The aging Ukrainian grid, although

far easier to hack, is the reason power was restored

in just a few hours; an attack on the United States

could last weeks. ISIS hackers are attempting to

exploit just this, as they have already tried many

times to take down portions of the U.S. grid. While

they have thus far proved inept, the consequences

of a complete shutdown of an airport’s power or of

the New York energy grid during rush hour, for

instance, are not to be understated.

Hacking Ukraine’s power grid itself was not

particularly difficult but the logistics and planning

were extremely sophisticated, which is why

experts deemed it a coordinated international

attack. Military spokesman Andriy Lysenko stated

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