Spanish Renewables Giant Looks to Expand Anywhere But Home

(Bloomberg) -- Renewables giant Acciona SA is looking to grow its business all over the planet -- just not at home.

“We are too concentrated in Spain,” Rafael Mateo, chief executive officer of the company’s Acciona Energy unit, said in an interview Monday on the sidelines of the Bloomberg New Energy Finance Future of Energy Summit.

Spanish Renewables Giant Looks to Expand Anywhere But Home

From Texas to Australia and Egypt to Chile, the Alcobendas, Spain-based company is adding about 1,000 more megawatts of solar and wind power to the 9,500 of mostly wind power it already owns and operates in more than 20 countries. The company announced Tuesday plans for a 145-megawatt wind farm in Texas, its second in the state and ninth in the U.S. The Palmas Altas project is expected to be complete in November 2019 and will sell power in the wholesale market.

At issue are saturation and the economy.

“In Chile, you just have to add and add and add,” Mateo said, noting that many developing countries need to build more and more power plants just to keep up with economic growth.

Acciona plans to participate in power auctions this year in Mexico and wants to build projects in Argentina and maybe Peru. It’s not looking to build in Brazil, Mateo said, in part because the country is so big and has lots of powerful local utilities. While Mateo is open to growing through mergers and acquisitions, he has no plans to do so right now, he said.

Financing isn’t seen as a problem even if interest rates rise, Mateo said. In place like Mexico, Chile, Australia and the U.S., the bigger challenge is coming up with “fully bankable” projects that are permitted, have secure long-term customers and enough sunlight and wind to guarantee returns.

“If the project is good, there is no problem in financing,” he said.

European Overcapacity

Europe, by contrast, has an overcapacity of power plants, so fossil-fuel generators will have to close to make room for wind and solar, Mateo said. And before Europe can be a big driver of growth again, it needs to restructure power markets to allow for more long-term contracts between generators and customers, Mateo said.

Western Europe, of course, does allow for some business. In southern Spain, Acciona is busy dismantling some 90 wind towers and replacing them with 12 modern ones that can produce the same amount of power. But the big phase of growth there won’t happen until the rival fossil fuel generators shut, he said.

“I tell my colleagues, ‘If we were in the coal mining industry, wow, we should probably prepare our CVs,’” he said. “But not in renewables, because renewables is the present.”

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