Enel Green Power heads south to offset gloom in Italy

WORLDWIDE: Italian renewable energy group Enel Green Power (EGP) is targeting wind power in Latin America and Morocco as it seeks to break out of a declining domestic market.

by Heather O'Brian 1 May 2012

The move is part of the firm's strategy to target emerging renewables markets, amid regulatory uncertainty and falling investment opportunities at home and in other countries with mature wind industries.

"The first country among the new markets which we will target in wind is Morocco, where EGP has defined a substantial volume to be reached by 2016," said EGP head of business development Ingmar Wilhelm.

The firm was a selected bidder for the 150MW wind farm at Taza, losing out in April to a consortium led by France's EDF Energies Nouvelles, but Wilhelm said it is "preparing a strong consortium" for the four-project, 850MW wind tender launched in January by state utility ONE.

Morocco's high energy dependency is a major driving factor. "Morocco has a very clear energy diversification strategy," said Wilhelm. EGP is also considering wind investments in South Africa.

In Latin America, the firm's ties with utility Endesa, controlled by Enel, "help to accelerate entry in new countries and hedge typical market and energy off-take risks," he added. The strategy for new markets centres on the potential for growth in at least two of its main renewable energy technologies. Aside from wind - which represented 50% of EGP's total installed capacity of 7.1GW at end-2011 and 57% of total planned capital expenditure in 2012-2016 - the company is active in hydroelectric, photovoltaic and geothermal power.

South American way

Peru and Colombia boast potential in all four technologies. EGP has identified roughly 1GW of potential wind projects in Peru. "The Peruvian renewable-energy market is based on auctions for long-term PPAs," said Wilhelm, "putting in place a long-term, stable remuneration system."

Wind farms in Peru and Colombia would add to a single 24MW operating wind farm in Costa Rica and projects under way in Mexico, Brazil and Chile. In Mexico, EGP is constructing a 74MW wind farm and is ready to build another 70MW. Both Chile and Brazil count 90MW in ready-to-build wind capacity. EGP is targeting combined capacity of 1.15GW in these three markets by 2016.