M&A Move

Repsol to acquire Houston-based renewable energy platform

Repsol announced that it's buying ConnectGen from Quantum Capital Group, a Houston-based private equity firm that focuses on energy investments. Photo via Getty Images

Spanish energy giant Repsol is breaking into the U.S. market for onshore wind power with its $768 million deal to purchase Houston-based renewable energy startup ConnectGen.

Repsol is buying ConnectGen from Quantum Capital Group, a Houston-based private equity firm that focuses on energy investments, according to a September 8 news release. Quantum’s renewable energy arm, 547 Energy, owns ConnectGen.

ConnectGen, founded in 2018, operates 278 megawatts of solar energy projects in Arizona, California, and Nevada. Its nationwide development pipeline features more than 20,000 megawatts of wind power, solar power, and energy storage projects.

“All of us at Quantum and 547 Energy are looking forward to watching Repsol convert these development projects into operating assets that will help power the American economy with clean renewable electricity over the next decade,” says Wil VanLoh, founder, chairman, and CEO of Quantum.

Quantum and its affiliates have managed more than $22 billion in equity investments since the firm was founded in 1998.

Once the deal tentatively closes by the end of 2023, current ConnectGen employees, including senior executives, are expected to join Repsol’s renewable energy team. Caton Fenz has been CEO of ConnectGen since 2019. He previously was the startup’s chief development officer.

“The addition of ConnectGen accelerates our commitment to renewable generation in one of the markets with the greatest potential for future growth. In that sense, bringing on board its valuable team of experts is key to [ensuring] our successful future growth with robust profitability in the market,” says Josu Jon Imaz, CEO of Repsol.

Repsol has targeted 20,000 megawatts of installed global capacity for renewable energy by 2030. The company owns 245 megawatts of renewable energy assets in the U.S. and 2,000 megawatts worldwide.

ConnectGen’s capabilities build on Repsol’s 2021 purchase of a 40 percent stake in Chicago-based Hecate Energy, which develops solar power generation and energy storage projects.

Repsol aims to operate 2,000 megawatts of installed renewable energy capacity in the U.S. by 2025 and more than 8,000 megawatts by 2030. Aside from the U.S., Repsol owns renewable energy assets in Chile, Italy, Portugal, and Spain.

In the U.S., Repsol, ConnectGen, and other companies are capitalizing on tax credits contained in the federal Inflation Reduction Act of 2022 that are designed to spark development of clean energy projects. The law earmarks nearly $400 billion in federal funding for clean energy initiatives.

A new study funded by the BlueGreen Alliance, a group backed by labor unions and environmental organizations, indicates the law could add more than 1.5 million jobs in the solar and wind power sectors by 2035. Tens of thousands of these jobs will undoubtedly be created in Texas.

The White House estimates the Inflation Reduction Act will spur $66.5 billion in Texas investments in large-scale clean power generation and storage projects between now and 2030.

“Strengthening our energy security advances two goals: It lowers costs for all Americans by ensuring a resilient and affordable supply of clean energy, and it fosters American innovation in difficult-to-decarbonize sectors,” Lily Batchelder, assistant secretary for tax policy at the U.S. Treasury Department, said in a recent update about the law.

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A View From HETI

Greenhouse gases continue to rise, and the challenges they pose are not going away. Photo via Getty Images

For the past 40 years, climate policy has often felt like two steps forward, one step back. Regulations shift with politics, incentives get diluted, and long-term aspirations like net-zero by 2050 seem increasingly out of reach. Yet greenhouse gases continue to rise, and the challenges they pose are not going away.

This matters because the costs are real. Extreme weather is already straining U.S. power grids, damaging homes, and disrupting supply chains. Communities are spending more on recovery while businesses face rising risks to operations and assets. So, how can the U.S. prepare and respond?

The Baker Institute Center for Energy Studies (CES) points to two complementary strategies. First, invest in large-scale public adaptation to protect communities and infrastructure. Second, reframe carbon as a resource, not just a waste stream to be reduced.

Why Focusing on Emissions Alone Falls Short

Peter Hartley argues that decades of global efforts to curb emissions have done little to slow the rise of CO₂. International cooperation is difficult, the costs are felt immediately, and the technologies needed are often expensive. Emissions reduction has been the central policy tool for decades, and it has been neither sufficient nor effective.

One practical response is adaptation, which means preparing for climate impacts we can’t avoid. Some of these measures are private, taken by households or businesses to reduce their own risks, such as farmers shifting crop types, property owners installing fire-resistant materials, or families improving insulation. Others are public goods that require policy action. These include building stronger levees and flood defenses, reinforcing power grids, upgrading water systems, revising building codes, and planning for wildfire risks. Such efforts protect people today while reducing long-term costs, and they work regardless of the source of extreme weather. Adaptation also does not depend on global consensus; each country, state, or city can act in its own interest. Many of these measures even deliver benefits beyond weather resilience, such as stronger infrastructure and improved security against broader threats.

McKinsey research reinforces this logic. Without a rapid scale-up of climate adaptation, the U.S. will face serious socioeconomic risks. These include damage to infrastructure and property from storms, floods, and heat waves, as well as greater stress on vulnerable populations and disrupted supply chains.

Making Carbon Work for Us

While adaptation addresses immediate risks, Ken Medlock points to a longer-term opportunity: turning carbon into value.

Carbon can serve as a building block for advanced materials in construction, transportation, power transmission, and agriculture. Biochar to improve soils, carbon composites for stronger and lighter products, and next-generation fuels are all examples. As Ken points out, carbon-to-value strategies can extend into construction and infrastructure. Beyond creating new markets, carbon conversion could deliver lighter and more resilient materials, helping the U.S. build infrastructure that is stronger, longer-lasting, and better able to withstand climate stress.

A carbon-to-value economy can help the U.S. strengthen its manufacturing base and position itself as a global supplier of advanced materials.

These solutions are not yet economic at scale, but smart policies can change that. Expanding the 45Q tax credit to cover carbon use in materials, funding research at DOE labs and universities, and supporting early markets would help create the conditions for growth.

Conclusion

Instead of choosing between “doing nothing” and “net zero at any cost,” we need a third approach that invests in both climate resilience and carbon conversion.

Public adaptation strengthens and improves the infrastructure we rely on every day, including levees, power grids, water systems, and building standards that protect communities from climate shocks. Carbon-to-value strategies can complement these efforts by creating lighter, more resilient carbon-based infrastructure.

CES suggests this combination is a pragmatic way forward. As Peter emphasizes, adaptation works because it is in each nation’s self-interest. And as Ken reminds us, “The U.S. has a comparative advantage in carbon. Leveraging it to its fullest extent puts the U.S. in a position of strength now and well into the future.”

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally appeared on LinkedIn.

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