How would you assess the current developments defining the Portuguese renewable sector?
The market of renewables is quickly becoming one of the most dynamic segments of the national economy. Ease of doing and starting a business in Portugal is much easier today than few years ago. In the renewable sector, once you have the environmental license–that's still the most challenging part of the business–it is possible to get a project started within one year. In 2018, Akuo decided to set up a branch in Portugal. When we entered the market, the sector was not as regulated as it is today. Then, the main challenge was related to the grid connectivity. After one year, in 2019, the government understood the importance of allowing companies and operators to bid on the grid. It was a good time for us, as we entered the market in 2018, we had all the time needed to prepare for this auction. We managed to win the bid in 2019 and were awarded three projects. We won 370MW of connection. For the group worldwide, we have a goal of 1.2-1.3GW in operation. So, after ensuring 450MW here in Portugal, we can proudly declare that 20-25% of the group's total capacity is generated here. Winning this auction cemented Akuo Portugal as a leading contributor to Akuo Worldwide. It is a big achievement for the company.
What are the main project you have ongoing and what is Akuo’s business model?
In November 2021, we launched the project of the Solar Park de Santas in Monforthe. We have a pool of experts carrying out the project. We are facing some challenges, mainly related to the price increase due to global supply chains being adversely affected. The price of panels has increase but we will easily overcome these obstacles. We have the know-how, and we are ready to replicate this project. The idea of Akuo, our business model, is always the same: we keep the assets. We generate our revenue selling electricity. This model implies that we will develop, finance, build and operate the asset. Traditionally, companies operating in the sector developed and sold the asset to other companies. They make money from the sale of the product. We make money from the sale of electricity. We have a long-term vision, characterized by a long-term positioning in the market. Akuo has a strong commitment in Portugal. We are developing projects to operate them in the long term—30 years—we took the decision to set up our internal operation in maintenance, and some developers can subcontract the maintenance.
How will do you differentiate yourselves in what is a small, competitive market?
The market is getting more and more competitive. How do we make the difference? Long-term vision is key, because in the auctions you have low prices and a big contribution in 10 years. Every player needs time to pay the investment back and to reach the breakeven point. Even 15 years might not be long enough to make a return on the investment. It would take 30 years to bring out the big players' financial power that had a long-term vision to make a difference. It is not a market or investors that want a high return quick. It is a market for the very long term at a steady pace. So that's how we make the difference. Second, we are a private company. Akuo’s two owners offer the company a flexibility which is an advantage. We are quick to take decisions and we are able to take risks, which is key in a fast-moving, changing environment.
What emphasis are you placing on R&D and technology?
We have a large R&D department in Paris. What we see as the main areas for investment or we are dedicating a lot of time and resources is storage. Storage is a key component to solar and intermittent energy. Akuo has already developed a lot of storage projects and exported this know-how to Portugal. Additionally, we are focusing on solutions based on the concept of floating solar. This is also both an innovative and alternative project. These are more expensive than traditional solar but are flexible, as they can adapt to a variety of scenarios and landscapes such as land around artificial water surfaces or agricultural lands where it is not possible to install traditional solar panels. In these kinds of peculiar contexts, there is the need of designing specific solutions and, here at Akuo, we have the know how to do that. We are also pioneer the concept of “Agro-Energy,” allowing two different sectors to co-exist. The first project has been already executed by the company. We will try to replicate this model in Portugal as well.
What are your short-term priorities and targets?
The short-term priority is to build the three projects we were awarded. The major challenge for 2022 is to launch the construction of these three big projects. This is crucial for us the company because all the strategy is based on all these projects. We want to start operating the projects as soon as possible. It is a lot of work but now there is a team, with the right people, and it will be a success.