The world is rapidly moving towards a renewable energy transition, with Europe leading the way. The share of gross final energy consumption from renewable sources for European Union (EU) reached 22 per cent in 2020, exceeding its original target of 20 per cent. As per the world economic forum, the United Kingdom sourced 42 per cent of its energy from renewable sources in 2020. The region as a whole is witnessing a rapid push towards renewable energy development with greater participation from the government, developers and power producers in the EU’s path towards climate neutrality by 2050.
Econergy is an international independent power producer of utility-scale renewable energy projects and develops, owns and operates these projects. At present the company is operating across five European countries. The power producer is actively advancing its clean energy portfolio with the development of solar PV, wind and energy storage projects. In a recent interview with REGlobal, Wolf Dietrich, Director Development, UK & Europe, Econergy, shared his views on the key issues in the renewable energy sector in Europe, the company’s progress and its plans for the future…
What is Econergy’s present clean energy portfolio? Currently Econergy spans across five European countries, does the company plan to expand its operations to other continents or across more countries within Europe?
Econergy is an active developer and IPP in solar PV, wind and storage projects across a number of key European markets, including the UK, Italy, Spain, Romania and Poland. With an overall pipeline of projects of more than 6 GW across Europe, Econergy aims to have approximately 3GW of renewable energy projects connected to the grid by the end of 2024. Econergy has invested €450m in clean energy projects in the past decade.
Part of Econergy’s forward-looking strategy will involve continuing to invest in clean energy projects in markets where changes to the regulations allow the industry to expand via PPAs, diversification of services to the grid and the introduction of other renewable energy technologies. As part of its continued development and growth, Econergy is looking to expand to two additional markets in the EU within the next six to nine months.
“Econergy is looking to expand to two additional markets in the EU within the next six to nine months.”
How have the past two years been for the company especially with respect to the pandemic? What difficulties did the company face and what were the steps taken to overcome these challenges?
The pandemic caused disruption in global supply chains which Econergy – along with other energy companies – was not immune to. In response, Econergy has focused on developing the resilience and sustainability of its supply chains, which has enabled the company to continue developing and expanding its European project pipeline during this period. The company’s position as an IPP as well as a developer has certainly provided Econergy with greater insulation against the supply chain disruption and increasing costs faced by other companies in the space, given its work across the entire value chain.
Econergy has upcoming energy storage projects in the UK. Which storage technologies would be primarily focused upon in these projects? Are you also planning to foray into other emerging areas like offshore wind or green hydrogen?
In the UK, Econergy is expanding its operations with a pipeline of projects consisting of more than 800MW of storage (with expected 1,600MWh capacity) and 900MW of solar PV. Econergy expects their total pipeline of storage and solar PV projects in the UK to be operational by 2025.
The UK is a key market for Econergy and is leading the development of storage technology, which has a key role to play in reducing reliance on fossil fuels and enabling the clean energy transition. Econergy aims to become a key player in the UK storage market as it looks to significantly expand its portfolio of projects under development in the coming months.
Econergy are not currently considering offshore wind or hydrogen for development.
“The UK is a key market for Econergy and is leading the development of storage technology, which has a key role to play in reducing reliance on fossil fuels and enabling the clean energy transition.”
What are the key emerging trends in Europe’s renewable energy space? What are the prospects for solar power vis-à-vis wind power in the markets that you operate?
Growing market demand for renewable energy generation has led to an influx of developers and an overall tightening of returns. This is being driven in part by increasingly ambitious decarbonisation targets being set by European lawmakers. We also expect the current volatility in energy prices to continue in 2022 which will result in PPA offtakers increasing the prices. For example, in Italy, a 10 year PPA used to be in the range of €45/MWh 12 months ago and now it is possible to close at approx €65./MWh
The shift toward bilateral PPAs in the solar and wind industry will also continue. This is happening in key markets such as Poland and Romania right now where we see a growing number of opportunities in the coming years as the sector develops and matures in these countries at pace. This is underlined by our recent agreement to construct Rătești, the largest solar plant in Romania.
What are the key challenges that developers face in the European renewable energy markets? What are possible solutions for the same? Which countries/markets are more favourable investment destinations according to you?
Reflecting growing investor demand for renewables projects, prices for solar panels have risen with transportation difficulties and a supply shortage likely to keep prices elevated for up to 18 months. For Europe generally, the price of ready-to-build solar projects has doubled in the past year because there is an insufficient number of projects to satisfy investor demand. This presents an opportunity for companies like Econergy which are developing projects internally and so are less exposed to rising prices.
What is your take on repowering of existing wind power assets? Do you foresee a high potential in the markets that you operate in?
We are approaching the end of the ‘incentives period’ for wind farms in many countries, where in the years 2005-2010 the first big wave of installation took place. These projects are all in prime sites, as at the time they were available. So, repowering these sites with modern turbines, exploiting existing infrastructure – if not on a physical aspect, at least at permitting level – can be highly profitable. Econergy is regularly analyzing such opportunities.
With the entire renewable energy sector slowly moving towards greater digitalisation, what digital and automation tools are being used across your assets? Which technologies have greater uptake potential in this space?
In our project development phases, we are using automation tools to support our plan design – allowing us to analyse a variety of designs with different technologies and optimize our designs and development efforts. The increasing use of grid data is also enabling us to identify grid connections more efficiently.
In our operational phases, production data analysis based on AI technology is supporting our efforts to recognize malfunction and potential losses earlier and more accurately, saving time and minimising avoidable costs. Beyond this, our trading data analysis is helping us to increasingly optimize our trading activity, with the associated benefit of optimising our storage utility.
What are the company’s short-term and long-term targets? Where do you see Econergy in the next 5 years?
Econergy’s short-term targets include the successful and timely delivery of their 6GW project pipeline, helping to bring new renewable energy and storage capacity to grids across Europe. This includes the aim of constructing and connecting 3GW worth of projects by end of 2024 in five European markets. In the long-term, the company aims to expand its project pipeline, building on its long-term partnerships with UBS and Rgreen Invest to enter new markets and accelerate the low-carbon transition in Europe.