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The renewable energy vision former CEO David Crane had for NRG Energy (NYSE:NRG) may be taking shape just months after he was fired from his post. The utility is emerging as a leading bidder for assets held by bankrupt SunEdison, and if it can close on those assets, it could be a windfall for the company.

We won't know until at least next month if NRG Energy does win the bid, but if it does, the impact could be huge for the company and its yieldco. 

What NRG Energy has its eyes on

SunEdison hasn't found a buyer for the entire company or found a way to restructure its debt to stay in business. So, the company is being sold in pieces and there are 2.1 GW of assets held by SunEdison that it's reportedly begun shopping in bankruptcy. These include 1.25 GW of assets in development across the country, 200 MW of construction ready project in Texas, and 683 MW of projects near completion in Utah. The initial bid is $188 million for these assets and it comes from NRG Energy.  

It's not clear exactly how much money NRG Energy would have to invest to finish these projects. However, consider that completed renewable energy projects are worth $2-$3 per watt, well above the $0.09 NRG Energy could be paying for the assets. And with contracts in place, a lot of the work is already done. 

More bidders could emerge

NRG Energy is being called the "Stalking Horse" in the bid for SunEdison's 2.1 GW portfolio, setting a floor on what assets could sell for. But it also gives the company a front-row seat for the auction. Current plans are for bids to be submitted by Sept. 6 with an auction Sept. 9 and a Sept. 15 hearing to get approval for the sale.

We know that no buyer emerged for the entire SunEdison portfolio in bankruptcy. But the pieces, like this 2.1 GW group of assets, have value to investors. Bloomberg reported that Homer Parkhill of Rothschild Inc., an advisor to SunEdison's bankruptcy process, has said there were over 100 indications of interest in assets within the portfolio, so there could be a lot of bidders. Everyone from private equity funds to yieldco to utilities could be interested in buying renewable assets from SunEdison, but NRG Energy is currently a leader in the process.

The quick timeline is because renewable energy systems need to be completed in a timely manner so utilities can get predictable power. And they could lose value by sitting uncompleted in the bankrupt SunEdison. That's one reason there's a big rush to get the auction completed.

How the windfall could pay off

If NRG Energy does acquire 2.1 GW of assets, it'll complete them and likely drop them down to its yieldco, NRG Yield (NYSE:CWEN). The yieldco would pay cash for the assets and presumably the dropdown would both add cash to NRG Energy's coffers immediately and add to NRG Yield's dividend going forward.

This could be a big win for both companies and make NRG Energy a big winner from SunEdison's bankruptcy. We don't know exactly how the auction process will play out, but there's plenty of reasons for NRG Energy to want to win the auction if the price is right. There could be little risk and massive reward for the company, even allowing it to grow its renewable energy presence, something it worked toward for years coming into 2016.

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