Capitalizing on sunlight: Athon's US$200mn investment in solar generation

After Brazil's Athon Energia acquired 13 solar plants from Raízen Gera Desenvolvedora, a joint venture between the Gera group and Raízen, in 2023, the company now intends to invest 1bn reais (US$200mn) to continue growing.

With the new units, the company increased its operating capacity to more than 160MWp. 

In this interview, Athon CEO Daniel Maia discusses the firm's plans and the outlook for business in Brazil, which could include more acquisitions.

BNamericas: What are the prospects for the solar energy sector in 2024? Can the new import tax announced by the federal government obstruct the positive scenario for photovoltaic energy in any way?

Maia: Remote distributed generation (DG) projects have longer construction deadlines, so there’s a stock of projects to be developed in a few years. Rooftop solar energy projects, on the other hand, have a shorter time frame. So I think that, by 2025-26, there will be an increasingly significant portion of remote DG under the old law, while rooftop DG will be less attractive.

Today, remote DG represents somewhere between 10% and 20% of the total volume of DG in Brazil. The largest volume in terms of expected installed power is on rooftops. So we may see a slowdown in the DG market, since the stock of small, rooftop projects is resolved more quickly.

Thus, it is possible that the share of remote DG in the total will increase. According to [consultancy] Greener, remote DG currently has 2.5GW of installed power, a figure that could reach between 7GW and 9GW by 2026.

It's important to note that remote DG has more technical investors, usually with a company or fund behind it. Rooftop DG is generally a small, family-run business.

Editor's note: Remote DG is when energy is produced in one place and compensated for in another, as long as it is destined for consumer units belonging to the same owner.

BNamericas: How are Athon Energia's activities, projects and plans going?

Maia: We've always focused a lot on photovoltaic generation and on companies operating nationwide whose mission was to address ESG issues, seeking a greener generation matrix, but that were restricted from migrating [from the regulated] to the free market. 

We've just announced an acquisition and we're on our way to 160MW installed, 80% of which is concentrated among companies seeking energy for their own consumption, in eight Brazilian states.

In the case of the other 20%, we partnered with large groups that have capillarity with smaller, regional companies. 

BNamericas: How does the opening of the market affect the company's business?

Maia: We're talking about perhaps 1% of the country's consumer units potentially migrating to the free market. 

The level of technology required will increase a lot, as we’ll be moving from thousands to millions of consumer units in the free market, so the level of complexity will be different. That's why we're trying to simplify things as much as possible.

Today, we serve 16,000 consumer units, and that number should rise to at least 20,000 with our own plants alone. We could still reach more than 50,000 customers, taking into account third-party plants that partner with us or lease plants.

BNamericas: What are the investment plans?

Maia: We’ve invested 700mn reais so far and, going forward, we plan to invest an additional 1bn reais. 

These new investments will be directed, for the most part, towards the expansion of new plants, especially remote distributed generation, mainly solar photovoltaic. As a result, we should reach 250MWp of installed power by 2024 and between 300MW and 400MW by the end of 2025, mid-2026.

BNamericas: Are there any prospects for new acquisitions/purchases of PV solar plants?

Maia: Yes, we're talking about a very new market in Brazil. There’s no player with more than a 10% market share in the DG market. Whoever has the most own assets, if anything, has 300MW. It's a highly dispersed market. Therefore, we think that there will inevitably be consolidation and we’re prepared to be a platform for consolidation in this market.

We predict something similar to what happened in the cell phone antenna market. The owners of the antennas, who were the telephone operators, started renting antennas from companies that specialized in this business.

In DG, we believe that there will be companies that specialize in managing distributed mini-generation assets.

Editor's note: A distributed micro-generation plant has installed capacity of up to 75kW, while a distributed mini-generation plant has between 75kW and 3MW.