The rise and fall of a green-energy superstar

livemint.com:

EPES, Ala.—When Enviva began construction here on the world’s largest wood-pellet plant, it had contracts worth more than $20 billion to supply overseas power plants with an alternative to coal. The company’s shares were near an all-time high. That was two years ago.

The Epes facility is still under construction, but Enviva is in bankruptcy court. Demand hasn’t been an issue. Renewable-energy subsidies in Europe and Asia encourage electricity generators to burn wood instead of fossil fuels.

U.S. pellet exports are on pace to exceed last year’s record. Enviva’s problem is that it promised buyers more pellets than it could make, and for cheaper than it ended up costing to produce them.

Then it made a disastrous trade to try to cover the shortfall. The roughly $350 million trading debt that ensued—owed to a German power producer that is one of its best customers—forced Enviva to file for bankruptcy protection in March so that it could shed debt and try to renegotiate supply deals it says are no longer profitable. Enviva’s financial collapse has jolted some of the nation’s largest clean-energy investors, adding to the list of financial disappointments for the ESG investment sector, which raised trillions of dollars for funds that promise to invest with environmental, social and corporate-governance goals in mind.

Some firms, such as startup electric-vehicle makers, have gone bankrupt, while high interest rates have hammered even businesses with proven technologies, such as solar power producers. Scientists and environmental groups have raised questions about the climate claims put forth by the wood-pellet industry. Burning wood, many scientists and environmentalists say, is less efficient than burning fossil fuels, emitting