SIMPLIFICATION AND CLARITY TO MAKE RES GROW. STARTING FROM THE PPAs
By Francesco CALABRETTA – Country Manager Italy, Audax Energia
"Simplification" And "clarity". Here are some of the most used words - if we remove those linked to the medical-health universe - in this exceptional and difficult 2020.
There is a belief in many quarters that to reconnect the interrupted or suspended thread of activities during the lockdown period and avoid further economic-social disruptions in the months ahead, it is necessary and urgent to identify more efficient ways of "doing" and "deciding". and effective. Starting frompower and the promotion of sustainability policies linked to it.
In June, RE-Source, an association that brings together world-class industrial groups interested in renewable energy, addressed a letter to the governments of the Member States of the European Union. The opportunity was to make one's voice heard in view of the discussion on the continental plan to support the economy, inviting clarity on how to use the 750 billion euros of the Recovery Plan, especially with regards to investments in sustainability. Among the requests, the first concerns the establishment of a political and regulatory framework that allows easier use of instruments such as corporate PPA, Power Purchase Agreement.
In fact, although they are valuable development tools for RES (non-hydro), they are often difficult to use, slowed down by little regulatory simplification and the presence of bureaucratic barriers.
Yet the construction of new clean energy generation plants should be a priority and not just one of the options. And the European Green Deal policy launched in January is also based on this principle. Furthermore, if you want to fight the climate change and respecting the commitments made to reduce emissions it is essential to facilitate the construction of wind and photovoltaic parks. To clarify: between now and 2030, 826 GW are currently planned for new non-hydro Fer plants, with investments estimated at around 1,000 billion dollars. However, if we want to live up to what was decided in the Paris climate agreements, at least 3,000 GW would be needed... The deficit is evident and not negligible (UNEP-BNEF report 2020).
In addition to the environment, it would have a positive effect on the economy. Investing in renewables means creating new business opportunities for companies and generating employment, even in the short-medium term: essential elements if you want to recover what will be lost in terms of GDP and, consequently, decrease in income.
In Italy the RES sector is growing. According to the IREX Annual Report, in 2019 there were 211 operations for a total of 10.2 GW of power and 9.5 billion euros in value. In particular, it is worth highlighting the return of interest in new plants or projects: 51% of operations (in 2018 the percentage was 27%) concerned this type of intervention. An advancement that reflects the state of health of a sector that has regained dynamism and which has certainly benefited from the so-called FER1 decree.
Unfortunately, positive performances are often watered down or held back by an obstacle, as old as it is difficult to eliminate: this is the overabundant bureaucracy which causes more than half of the projects surveyed in Italy to be at a standstill, blocked and awaiting the necessary authorisations. An apparatus that Jacopo Giliberto on the Sole24 Ore defines precisely "a public administration that suffers from authoritarian gastritis, normative obesity, compulsive rhetoric".
An already complicated situation which, without corrective measures, could become unsustainable for the entire sector. With the risk that the most significant investments - in terms of value and entity - no longer have our country as their destination, but markets with less cumbersome mechanisms. Unless the shock - even cultural - generated by COVID-19 can finally change what exists today, starting from the simplified use of financial instruments capable of creating the conditions for large-scale investments, such as those for the construction of a plant of renewable energy generation. AND Let's return, therefore, to PPAs.
In 2019, the highest volume of long-term energy purchase and sale agreements for companies (Corporate PPAs) was recorded: 19.5 GW. In Europe alone, new PPAs relating to renewable projects reached 7.5 GW, marking +2.6 GW compared to 2018. The Scandinavian countries remain among the top users. The United Kingdom follows, while Spain continues to grow.
Audax Renovables in this it was among the first European companies to believe in PPAs. From 2017 to today it has signed over 1.7 GW, activating strategic partnerships with entities such as Trina Solar, WeLink, Innogy, Statkraft, Cox Energy. The validity of the strategic direction taken is confirmed by the results: the company closed the first quarter 2020 with an increase in gross margin of 3.2%, an EBITDA of 12 million and a profit of 1.4 million euros.
José Elias, president and founder of the Group, had claimed it in an interview released at the beginning of May, in the midst of the coronavirus emergency: "we are one of the few companies that are building photovoltaic systems today, in the midst of the crisis without suffering excessively from the consequences".
Now, out of the darkest period and hoping for the establishment of a simplified and efficient regulatory framework, we have the duty to insist on this line of development.
