As new players like oil companies make new investments in wind and solar power, and utilities left behind in the race to add renewable energy capacity play catch up, Cammisecra believes these new investors are essential to support growth in renewable energy.
Companies like EGP are used to the competition.
“We need new players to be active,” said Cammisecra, “and they are entering a booming market.”
Renewables represent 75% of capacity additions at a global level and their share could grow even more in the future, he stressed.
However, the newcomers will find seasoned competitors to meet them. “We have accumulated an experience, a presence, and a pipeline which they don’t have.”
Cammisecra said EGP's track record in renewable energy capacity tenders and “quasi tenders” from Europe to Africa, Latin America and the US in which a bidder’s competitive edge comes from “being cost effective and fast.”
However, he believes pure-play wind and solar developers, whose market opportunities are limited to securing capacity in tenders before selling projects on to pension funds or other investors, are now “stressed.”
One advantage EGP has over many competitors is that its parent company, Enel, is an integrated utility with 75 million customers, meaning there are also retail opportunities for selling power, Cammisecra claimed.
EGP’s renewable energy projects are also increasingly underpinned by power purchase agreements (PPAs), which represent a “more complex but also a more lucrative” way of selling power, he added.
Supply chain challenges
While the issue is not currently affecting the industry, even with the bankruptcy of Senvion, Cammisecra is worried the turbine manufacturing capacity will not be able to reach anticipated future demand.
“If you look at the manufacturing capacity we have installed today, it is not enough to supply the turbines we need for the future,” he said.
Given expectations of a growing requirement for renewable capacity and wind turbines, “there will be a need for investments in wind manufacturing capability, and even more importantly in the supply chain of the wind industry,” for components like gearboxes, generators, convertors, towers and blades, he said.
Turbine manufacturers are keenly aware of the issue, and Cammisecra believes there is “enough time for them to react, to attract new investments so that manufacturing capability can increase further”.
This will be done in conjunction with meeting market demands for new models and new technology can be rolled out at a regular pace.