Enel Green Power: Balancing the portfolio

WORLDWIDE: Enel Green Power is diversifying both geographically and in the renewables technologies it deploys, but the lion's share of the Italian firm's sizeable pipeline remains in wind power.

Latin America push… EGP already owns Stipa Nayaa in Mexico

Enel Green Power (EGP), the renewable energy arm of Italian utility Enel, traces its roots in wind development back to the 1980s, when it built Italy's first wind farm. Today it operates renewable energy plants in 16 countries, with wind turbines turning in 13 of these, and a total wind capacity of 5.7GW. European markets now play a marginal role in growth plans, as EGP focuses on projects in emerging markets and North America.

EGP targets markets where it sees the opportunity for at least two technologies in its generation portfolio, which also includes solar, geothermal and biomass. Alongside geographical diversification, it sees this as a way to maximise growth and hedge against risk. The company targets countries with strong natural resources and economic growth and a stable political and social backdrop. EGP business development head Antonio Cammisecra leads the push into new markets.

EGP's emerging market strategy has focused on Latin America, where the company has leveraged off the strong local position of Spanish subsidiary Endesa. Brazil, Chile and Mexico have already developed into decent-sized wind markets for EGP, which is now constructing its first wind farm in Uruguay, at 50MW.

EGP in November made further progress in Brazil, where it was assigned the right to sign 20-year supply contracts for a 90MW wind project and 254MW of solar photovoltaic capacity. It is now gearing up for a series of major Brazilian wind tenders expected next year.

EGP also aims to expand in Africa. Through a consortium including Siemens, EGP is among investors bidding in an 850MW wind tender to construct five wind farms in Morocco. It is also eyeing opportunities in Egypt. In South Africa, EGP was assigned 199MW in wind capacity in the third round of that country's renewable tender process for which financial closure is expected to be reached shortly.

Growth in the US, where EGP's wind capacity now stands at 1.6GW and will shortly reach 2GW, has been helped by development partnerships with Geronimo Energy and Tradewind Energy. EGP says the US continues to be a priority. "We use markets like the US to balance the overall risk of our portfolio," said EGP CEO Francesco Venturini. "It is probably one of the least risky and most stable markets in the world."

Among suppliers, both Siemens and Vestas turbines have featured in many projects in recent years, as EGP tapped into framework agreements for up to 2.6GW covering the 2011 to 2014 period.

EGP concentrates exclusively on onshore wind, partially a function of its absence from markets with significant near or mid-term offshore potential.

Now bringing online about 900MW-1GW of renewable capacity each year, EGP plans to gradually raise the bar to 1.5GW. Funds from the planned disposal of its French wind business and a minority stake in a 700MW portfolio of US green-energy assets could help accelerate growth. "We could probably do more (than 1.5GW), but we want to grow in a sustainable way," said Venturini. A sizeable portion of new capacity should come from wind, where EGP traces 15.9GW of a 21.2GW pipeline.