GreenYellow’s PV solar power plans in Brazil

GreenYellow announced it will invest 350mn reais (US$64mn) in Brazil in 2021. According to the company’s country manager, Pierre-Yves Mourgue, the resources will be earmarked for distributed generation and energy efficiency projects. 

“I understand PV solar in Brazil is something that will not recede. There is a little more than 4GW of [DG] PV solar power installed in the country, while Germany, where the best solar incidence is equivalent to the worst here, has over 40GW,” he told BNamericas in this interview.

BNamericas: How will this year’s capex be earmarked in Brazil?

Mourgue: First I’d like to stress these are 100% equity resources. Later on we could occasionally carry out a financial operation to capture debt, for example. But, so far, all we have done was with our own money.

For this year, 270mn reais relates to 63MW of solar power distributed generation [DG] contracts that we signed in 2020. We will connect this capacity in the second half of 2021 or the beginning of 2022.

The remaining share will be invested in energy efficiency, which represents half of our revenues. We have 1,400 energy efficiency contracts, 70% of them with the Pão de Açúcar group, where we have implemented measures resulting in 23% of energy savings. 

BNamericas: What is the general profile of the company’s clients?

Mourgue: In terms of energy efficiency, we are very much dedicated to the retail segment, especially in the food business, but also industrial and commercial sectors. In the PV solar area, we specialize in DG and already have 54MW operating and another 66MW to come online by the end of 2021.

We are focused on plants with an installed capacity of up to 5MW of remote DG. They are typically clients owning B3 units under the same CNPJ [federal tax number], like Oi and Claro telecoms, drug stores such as Drogarias Pacheco and non-food retail, like Magazine Luiza, Ponto Frio and the Fleury laboratory, which has ordered a 4.5MW plant in Rio de Janeiro.

It is more complicated when it comes to franchise networks, since these cases require the use of multiple CNPJs, which implies paying the ICMS [state service] tax, unless you are in Minas Gerais state. 

BNamericas: How much is the company expecting to grow in the coming years?

Mourgue: Brazil currently represents around 30% of the revenues of the group, which operates in 18 countries. We are really confident in Brazil's energy efficiency potential. Regarding DG, we must see how it will play out after the change of the [electric power compensation system] rules, but I understand PV solar in Brazil is something that will not recede. There is a little more than 4GW of [DG] PV solar power installed in the country, while Germany, where the best solar incidence is equivalent to the worst here, has over 40GW. 

BNamericas: How could the new power tariff compensation system for DG impact Green Yellow’s local businesses?

Mourgue: This will depend on the reduction of the credits for the DG system owners. We participated in Aneel’s public consultation about this subject and asked the regulator that the change was not retroactive and smoothly deployed. It is a delicate equation as it also involves exchange rate, since a significant part of the equipment is imported from China, besides the price of steel used in solar trackers, which has increased.

BNamericas: How does Brazil’s electric power sector compare with that of European countries? 

Mourgue: Brazil is a developed country in terms of energy, with an electric matrix mostly based on renewable sources. And it still has a fantastic wind, biomass and solar potential. Meanwhile, its infrastructure is not bad. There is a lot to be done, like power transmission lines, but who does not have such problems?

A sensitive point is the country’s dependence on hydro power in view of the global climate changes. So thermoelectric options will have to be considered, while increasing energy efficiency in order to reduce the energy intensity in the GDP growth. 

BNamericas: What about other Latin American countries? Where does GreenYellow operate or plan to open businesses?

Mourgue: We started operating in Colombia in 2013, one year before we entered Brazil, and we are also in Panama. We do not have concrete plans to expand in the region. This would be a matter of opportunity, in case, for example, we signed an energy efficiency contract with a transnational group. But we see market potential in countries like Chile, Argentina, Paraguay and Uruguay.