What GreenYellow is targeting in Brazil

GreenYellow is completing ten years of operations in Brazil and is hungry for new opportunities in solar power and energy efficiency. 

Also on the company’s radar are electromobility and energy storage, says the company’s global CEO Otmane Hajji, who provides an overview of projects, investments and market outlook. 

BNamericas: What are the main projects GY is developing in Brazil?

Hajji: In the field of solar energy, recent changes in distributed generation regulations in Brazil have led us to adjust our project portfolio, particularly due to the impact on the profitability of remote self-consumption projects. 

We’re now focusing primarily on on-site generation for the commercial and industrial sectors, where there’s no grid injection. This approach allows us to serve clients in the free market without regulatory impact. 

Given the favorable conditions for solar equipment costs, rooftop solar energy has become highly competitive compared to total energy costs in the free market. This has created promising opportunities, such as our recent contract for a 3MWp rooftop solar project with an industrial client in the automobile sector.

In energy efficiency, we’re developing new services around compressed air systems, heat pumps, and chilled water installations. Our recent contracts with industrial companies and shopping centers reflect a strong alignment with our ‘as a service’ business model, which enables us to provide integrated energy efficiency solutions fully financed by GreenYellow. 

BNamericas: How much does the company plan to invest in the coming years?

Hajji: At the GreenYellow Group in 2024, our signing targets aim to achieve 150GWh in annual energy savings and secure 400MW in solar contracts. We also plan to mobilize 500mn euros in new financing from three main sources: project finance, which is essential to executing our projects; local financial partnerships in Asia and Latin America, focusing on minority investors or targeted asset sales; and a new funding line to drive our multi-geography expansion across Europe.

In Brazil, our total investments are projected at 400mn reais for 2024. Our investment plan for the coming years remains confidential at this time.

BNamericas: What are the main challenges to growth?

Hajji: In renewable energy, challenges include high financial barriers, such as difficulties in accessing capital for businesses and industries, fluctuations in exchange rates, and high interest rates. 

Additionally, the lack of regulatory clarity hinders investment security, while the high initial costs for clean energy production and distribution infrastructure present another major challenge. Modernizing infrastructure with smart grids to improve efficiency is essential but requires significant investment. 

There’s also the cultural element where traditional sectors often view energy as a cost rather than a strategic asset, which slows the adoption. 

Lastly, the absence of consistent long-term public policies limits the competitiveness of renewable energy compared to regions like Europe, where favorable policies have accelerated the deployment of solutions such as rooftops and photovoltaic carports. In Europe, two-thirds of the added solar capacity each year comes from this model.

BNamericas: Is Brazil's surplus energy due to the strong growth of renewables hindering new solar generation investments?

Hajji: The cost of energy in Brazil's free market has hit rock bottom in recent months, which can indeed impact the implementation of new plants, given that customers' current costs are at a historic low. On the other hand, equipment costs have also decreased, helping to balance the scales.

As mentioned, we’ve made progress in several negotiations for commercial and industrial projects where we have found a favorable economic balance, allowing the customer to achieve a reduction in their total energy costs in the free market with local self-generation.

 Additionally, the growth of intermittent energy sources presents the opportunity for battery storage projects, and we estimate significant growth in this market next year, with further reductions in battery costs and a stronger regulatory framework for these types of projects.

BNamericas: What are the prospects for the electromobility and energy efficiency markets?

Hajji: Energy efficiency is one of the pillars of the energy transition, and Brazil still has much to explore in this area. We see great potential in various segments, such as industry, retail, commercial buildings, and shopping centers. What still needs to advance is the culture and relevance of this topic within companies and how it can be addressed more strategically and in a more structured way. That’s why we have a very robust energy efficiency methodology to support the client in identifying what will truly bring significant gains to their operation, as well as a business model that doesn’t require investment or asset operation by the client.

Regarding the electric mobility market, the prospects seem promising but are still emerging. The country shows significant growth potential, with increasing demand for sustainable transportation solutions, but it remains hindered by the high cost of vehicles and insufficient charging infrastructure. As the government implements incentives and investments in charging stations increase, the market will be able to accelerate its transition. 

At GreenYellow do Brasil, we’re closely monitoring these developments and will consider opportunities to expand our existing offer from the European market as part of a strategy to support the global decarbonization of the energy sector.