Can you give us an overview of the main strategic goals for Voltalia for the coming 12 months?
Voltalia will continue developing renewable energy projects and participating in auctions. In addition, we are focused on selling part of our developed projects and consolidating strategic partnerships. Proof of this is the newly announced partnership between Voltalia and Echoenergia, a company controlled by the Actis group. The 197MW sale to Echoenergia demonstrates our capacity to develop quality projects. This agreement also offers Echoenergia access to a series of ready-to-build projects up to a 500MW (including the 197MW already sold).
Our strategy consists of developing a large volume of highly competitive projects with the view of keeping some of them while partnering with equity partners for others.
In parallel, we are building 223 MW in Brazil, which is a sum of the 163 MW of wind projects that we won in the auction of December 2017, with 60 MW also of wind projects won in the auction of August this year. Our expectation is to reach 600 MW in operation in Brazil in 2020 against 433.3 MW that we currently own. We have a portfolio of more than 2 GW in projects and we will continue growing in Brazil, aiming at opportunities in auctions and in the free market.
Voltalia has strong experience throughout the value chain of a renewable project: Project Development, EPC, Operation & Maintenance and developing social projects.
What are the biggest lessons you’ve learned with regards to Renewable’s Auctions that you have been involved in?
Every new auction is different from the previous one and this is a big challenge. Each one has a different format, with different technical restrictions, competition, regulatory wise among others. For that reason, we always have to be creative and to check our assumptions. This evolution benefits the renewable sector making every auction more competitive and more adapted to the energy demands. Those facts make me very comfortable about the future of renewable energy in Brazil and in the world, which follows the same trend. This is a good piece of news for the planet! The Brazilian renewable energy market becomes quite healthy and mainly sustainable because renewable energy prices are naturally very competitive without much help from government subsidies.
In addition, it is important to say that, obviously, the auctions are essential to keep the Brazilian energy sector active and prepared to support the country's economic growth and the movement regarding energy transmission projects was a wise decision by the government. This was a gap that we had and all the wind projects from the construction of transmission lines to accelerate the flow the generated energy was an important step.
What would you say are the biggest challenges to the adoption of clean energy in Brazil?
The penetration of energy renewable in most power grids is still low and, in my view, the biggest challenge in the widescale adoption is to minimize its intermittent nature to increase the penetration.
The point is to resist the urge to put many gas thermals for power generation with the excuse that renewables are intermittent. In fact, it will be necessary to generate thermal energy for now, but the right volume will depend on our ability to minimize the intermittency.
Taking advantage of the extensive geographical area that Brazil has is a possible solution to reduce the issue. Brazil has excellent assets to overcome this challenge, which is the abundance of wind and sunlight. The intermittency and variability of renewable energy sources can be reduced by diversifying the geographical location, forecasting their variation, and integrating them. For this, the regulation of the hybrid system that combines wind and solar energy is essential for the sector such as the importance of storage system thanks to hydropower reservoirs, storage and co-located renewable assets could provide solutions to the intermittent nature of renewable energies, therefore increasing the penetration of renewables. In this way, I believe it is possible to increase the penetration of renewables, minimizing the use of thermals.
Another important issue is to build more transmission lines so that the generated energy can reach the Sistema Interligado Nacional to supply the population in general.
Where do you see the biggest business development opportunities for Voltalia in the region in the next 5-10 years?
The Northeast of Brazil is the ideal place to build a wind farm due to its topography and its wind regime is extremely favorable. In addition to the favorable conditions, Voltalia’s industrial approach, through the development of a large-scale production cluster developing a large volume of highly competitive projects, permit us to see great opportunities in the coming years.
Today, the cluster has 309.3 MW in operation, 223 MW to be completed in 2020 – the result of the wins we had in the last auctions – and the 197 MW recently negotiated with Echoenergia. That is, the Serra Branca cluster already has a volume (operating, contracted or sold) of 729.3 MW of renewable energy, with potential to grow by almost 1.3 GW becoming the largest renewable energy site in Latin America.
The balance of the cluster’s potential capacity will continue to be developed with the possibility for each new project to be owned by Voltalia or sold to third-party investors. Faced with the success of our cluster, we intend to expand this strategy and apply it in other Brazilian states, with potential for the development of renewable energy projects.
You have recently started the construction of the largest wind project in Brazil – can you comment on the project and its significance?
We are starting the construction phase of our largest project in Brazil. Ventos da Serra do Mel and Ventos da Serra do Mel 2 are projects located in Voltalia’s Serra Branca cluster where we have a total potential of nearly 2 GW, making it one of the country's major wind power fields. Its size enables economies of scale and gains in operational efficiency.
We are working to accelerate the construction and progressively commission the turbines during 2020 – up to three years ahead of the start of the 20-year power sale contracts. This acceleration will enable us to start selling power on the free market at attractive prices before the start of the long-term sale contracts.
About Robert Klein
Robert Klein has been part of the Voltalia Group since 2006, when he participated in the implementation of the company’s operations in Brazil, for which he is responsible until the present day. Klein began his career in oil exploration in Brazil and participated in the configuration and development of French companies, particularly in the United States, in the Middle East and Asia, which are predominantly related to the energy sector. His last performance before joining Voltalia was the international development of a subsidiary of Group Fives-Lille in Brazil. Robert Klein is graduated in Mathematics at Aix-Marseille University, and in Engineering at Centrale Marseille. He has MBA in Business Administration at IAE FRANCE – Écoles Universitaires de Management.
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