Renewable Power Co. Hopes To Ride Sector Takeoff

Revolve Renewable Power Corp. (REVV:TSX; REVVF:OTCQB) develops utility-scale renewable energy projects in North America generated by wind, solar, and battery storage technologies.

The company currently has 2,883 megawatts (MW) of utility-scale projects under active development in the United States and Mexico, with 156 MW in the distributed generation (DG) project pipeline. It has produced more than 1.6 million kilowatt hours (KWh) of energy and sold 1,550 MW of utility-scale projects.

As part of its process of moving from a "pure" development company to becoming an owner and operator and expanding into Canada, the company last fall proposed acquiring Canada-based WindRiver Power Corp. WindRiver is an operator and developer of wind and hydro projects in British Columbia and Alberta.

"We are delighted to reach an agreement for our first acquisition in the Canadian market," Revolve Chief Executive Officer Steve Dalton said. "As we outlined in our updated corporate presentation a number of weeks ago, the acquisition of operating assets is a key part of our strategy to accelerate the transition of the Company to an owner / operator business."

"The acquisition of WindRiver will add long-term recurring revenue and cash flow to the business, accelerate our expansion into the Canadian market, and bring with it a highly experienced operations and development team," Dalton continued.

Once completed, the acquisition will add 96.63 MW (6.63 MW of its net operational) of capacity to Revolve's portfolio.

Push for Clean Energy 'Never Been Stronger'

According to a report by Deloitte Insights on the outlook for renewable energy this year, the sector is "set for a variable-speed takeoff as historic investment, competitiveness, and demand propel their development."

Renewable energy deployment is expected to grow by 17% to 42 GW in 2024 and account for almost a quarter of electricity generation, according to the Energy Information Administration.

"The tandem push of federal investments flowing into clean energy and pull of decarbonization demand from public and private entities have never been stronger," Deloitte wrote. "Moving into 2024, these forces could enable renewables to overcome hurdles caused by the seismic shifts needed to meet the country's climate targets. The uplift and obstacles shaping the year ahead have set the stage for a variable-speed takeoff across renewable technologies, industries, and markets." 

Water Tower Research analysts Shawn Severson and Graham Mattison noted in a January 30 research note that the company "trades at a significant discount to its peers."

As many as 29 jurisdictions representing around half of U.S. electricity retail sales have mandatory renewable portfolio standards, Deloitte reported, 24 requiring zero greenhouse gas (GHG) emissions or 100% renewable energy goals between 2030 and 2050.

On the corporate side, the membership in the RE100, a global initiative for entirely renewable energy, has more than 420 members, including 30 that joined in the first ten months of 2023, Deloitte said. A quarter of them are in the U.S., and many have 2025 target dates.

"The impact of unprecedented investment in renewable infrastructure will likely become more apparent in 2024," the report said. "Regulatory boosts to renewable energy and transmission buildout could help address grid constraints. And boosts to manufacturing could lay the foundations of a domestic clean energy industry with stronger supply chains supporting solar, wind, storage, and green hydrogen deployment."

Revolve Trades at Discount to Peers

Revolve noted that it provides investors with "higher development returns from utility-scale project development, balanced by long-term recurring cashflow from distributed generation projects."

The company also has sold 1,550 MW of wind and solar projects, generating close to US$20 million in revenue to date.

The company reported its net income as CA$0.9 million, or CA$0.01 per share, for the first quarter of 2024, compared to a loss of CA$0.6 million, or CA$0.01 per share, in Q1 2023.

Technical Analyst Clive Maund said it was worth looking at Revolve's 33-month chart "as it 'opens out' the base pattern, enabling us to see what was going on within it in more detail."

Water Tower Research analysts Shawn Severson and Graham Mattison noted in a January 30 research note that the company "trades at a significant discount to its peers," which included Westbridge Renewable Energy Corp. with a share price of CA$1.01 on January 24 compared to REVV's CA$0.32; and Greenbriar Sustainable Living Inc., which was CA$0.82 per share on the same day.

"(REVV) has delivered revenue and EBITDA, has a larger development pipeline than many of its peers, and further expected payments," the analysts said.

Westbridge's market cap was CA$100.3 million, while REVV's was CA$17.17 million. Greenbriar's was CA$28 million.

However, Dalton said it's companies like Polaris Renewable Energy Inc. that the company is reaching toward. Polaris has a market of about CA$271 million.

"They're the type of companies I'm looking towards to see what they're doing," Dalton said.

The Catalysts: New Projects, Earnings

A catalyst expected for the company includes the closing of the WindRiver deal, which was expected in December but is now expected soon.

Revolve also expects to realize more DG projects, like its signed Power Purchase Agreement (PPA) for a new 450 kWp rooftop solar project in Mexico.

The company's Q2 2024 results are also expected at the end of February.

Technical Analyst Clive Maund said it was worth looking at Revolve's 33-month chart "as it 'opens out' the base pattern, enabling us to see what was going on within it in more detail."

"This log chart makes clear that even though the price was still within the base pattern, the percentage price swings within it were sizeable — it more than tripled in price on the uptrend from the first low of the Double Bottom before losing it all again as it drifted down to form the second low of the Double Bottom," Maund wrote.   

On Revolve's 13-month chart, the price "broke sharply and decisively" out of a downtrend in November, and "another sharp upleg is to be expected soon that will quickly lead to a bullish cross of the main moving averages," Maund noted.

Ownership and Share Structure

About 60% of the company is owned by insiders and management, Revolve said.

Top shareholders include Joseph O'Farrell with 13.58%, Roger Norwich with 12.49%, the CEO and Director Stephen Dalton with 5.96%, President and Director Omar Bojoquez with 4.95%, and Jonathan Clare with 1.9%.

The rest is retail.

Revolve has a market cap of CA$17.17 million with 61.32 million shares outstanding and 36.36 million free floating. It trades in a 52-week range of CA$0.71 and CA$0.20.

Important Disclosures:

1. Renewable Power Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Revolve Renewable Power Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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