Even in a complicated year and a half, with the pandemic crisis hampering investments all over the world, Galp's renewable energy area managed to move forward with its projects and have a considerable portfolio of assets in solar. “We created a portfolio of 4 GW, of which we already have 1 GW in operation. We are one of the largest solar generators in the Iberian Peninsula and one of the largest in Europe, and we have the global goal of having 12 GW installed by 2030”, said Carlos Relancio, Head of Renewable Energies at Galp, at Energyear Portugal 2021.
The executive – who has worked in this sector for several years and joined the Galp universe almost two years ago – says he considers himself “an activist” in this issue of renewable energies and that he takes the energy transition very seriously. “What led me to join Galp is that the company's bet on renewables is not an aesthetic operation. The entire company's support for renewable energies is absolute and there is great enthusiasm for Galp to transform the world in terms of energy, and not just renewables”, he says. He also adds that the group is betting on technology and differentiated geography, namely in countries in Europe and America, assuming a very strong commitment in this area. “There are several other pillars of the business that are also contributing to the energy transition, whether in the area of innovation, batteries or hydrogen. Galp is not an infrastructure fund, we have an industrial focus for the projects and we are managing them in an integrated way, seeking to improve their efficiency and profitability, which is our greatest asset”, he says.
"Galp has an industrial focus for the projects and we are managing them in an integrated way, seeking to improve their efficiency, which is our greatest asset"
The Energyear Portugal 2021 event, which promotes the debate on renewable energies, new technologies and mobility, held in a hybrid model, combining face-to-face with virtual, had the participation, in addition to Carlos Relancio, of Marco Alves, CEO of MTX Solar, Teresa Ponce de Leão, president of LNEG, Duarte Bello, COO of EDP Renováveis, Elisa Ferreira, CEO of Amarenco and Pedro Amaral Jorge, President of APREN – Associação Portuguesa de Energias Renováveis.
This group of experts participated in the panel dedicated to the Current and Future Outlook of the Renewable Market in Portugal and the Challenges to Achieve the 2030 Goals. All agreed that the challenges and barriers to the business are still considerable, and one of the first obstacles starts right in the development of the project, especially in the various licenses needed and in the coordination between the various entities involved to fulfil the 24 months that are imposed by the renewables directive.
On this issue, Carlos Relancio agreed with his fellow panelists and stated that “Portugal is a very stable country at a regulatory level, it is not like others that change the rules in the middle of the game and scare investors. However, there is still some lack of coordination between the central administration and the various entities, which drags the development of projects for three, four and five years”. In his speech, Carlos also listed some of the main barriers of the business, which could, in some way, compromise the goals set for 2030, starting by mentioning that it is important to pay attention to market signals. “When we talk about the energy transition, everyone wants a greener and more sustainable world, but all this is financed by companies that want a return on their investments, and all they want is for them not to raise obstacles”, he warns. He says that when companies design a project that is supposed to be developed in 24 months, they do not expect it to last up to four or five years, as this uncertainty has numerous associated risks.
PRICE SPECULATION IS A RISK
One of these risks is undoubtedly the one associated with costs. When preparing a project, prices are a forecast, and any change may affect the returns of the project, and the longer the term when the investment may occur, the higher the uncertainty. Another barrier, and which in his opinion is not being properly addressed, is the issue of curtailment – that is, a risk of overloading the electricity network as there is too much supply. “This is something that has not been felt in Europe yet, as was felt, for example, in Latin America, where the networks were not so good. But in Europe we are now beginning to see that the greater the presence of renewables, the more these disconnection risks exist”, he says. Nevertheless, this risk can be mitigated with energy storage and energy flow management. “In renewables, we won the cost battle, but now we have to win the management battle”, he concludes.