WINDS OF SUCCESS

Portugal 2019 | ENERGY & GREEN ECONOMY | INTERVIEW

EDP Renewables has grown extensively to become the world's fourth-largest wind energy producer.

João Manso Neto
BIOGRAPHY
João Manso Neto studied economics at the Instituto Superior de Economia before completing a postgraduate degree in European economics from the Universidade Católica Portuguesa. In the past five years, he has served as Chairman of EDP Gestão da Produção de Energia S.A., CEO and Vice Chairman of Hidroeléctrica del Cantábrico S.A., along with numerous other senior management positions. Prior to these positions, he was a member of the board of Banco Português de Negócios, as well as head of the international credit division at Banco Português do Atlântico.

How does the company currently contribute to Portugal's energy mix through its installed capacity of wind farms? We began in Portugal and Spain, which today are two important markets, and have been developing from the beginning. We represent around 24% of the Portuguese installed capacity. Renewables not only reduce our import bill in terms of energy, but also have an important impact on local communities. Traditionally, renewable energy is located in areas with low levels of development, and the wind industry has been able to distribute income to those areas. An important part of our portfolio was linked to an industrial cluster in Portugal. About 10 years ago, there was a competition wherein developers not only had to build wind farms but also bring together an industrial cluster. Today, there are more than 1,000 people linked to that. It is important because this electrical production not only supplies the domestic market, but most of this production is exported. Our work in Portugal not only has a direct impact in terms of balance of payments and population, but also developing the industry itself.

EDP Renewables plans wind farms throughout the construction, development, and operation of the project. How does this meticulous process enable your company to fully maximize the value of your assets?

This is not a short-term activity but something we need a long-term view for. If we want to extract value, we have to go through the entire value chain, from the identification of the country and place to the kind of renewable energy available. We also have to obtain permits, which are extremely important. Renewables are important; however, they also have environment impacts that have to be mitigated. Subsequently, we focus on the optimization of the layout and construction, as well as operation and maintenance throughout the entire project. In the past, things were different, and we were just focused on production and generation. Today, we have to know how to sell in the markets and be able to manage market risks and have a better forecast of the wind. This enables us to be better prepared throughout the entire value chain.

What is your company's commitment to world-class engineering and construction standards?

The plants we build should be first-class plants. We do not build plants to have the maximum amount of MW but efficient. Wherever there is sun or wind, we must be available in order to generate power. Having a high quality of construction and first-class management is extremely important. Construction is just the first phase. We also need excellent operation methods; otherwise, we do not extract value. Before, developers externalized everything. We are increasingly internalizing activities to take care of what is going on in terms of operation. We have increased the quality of our work as well as the yield.

What have been the key factors contributing to EDP Renewables' successful international expansion?

Our core markets were Portugal and Spain, and we decided to go abroad to export our experience throughout the entire value chain. We began with France, though the big jump was with the US. Today, the US represents about 50% of our total capacity and has been the most dynamic market. We are proud when we go abroad to act as a local company. We have centralized expertise; however, when we go out to the field, we act as locals. Therefore, we are not seen as a foreign company. It is important that we do not have an obsession with centralization but with efficiency, respect, and understanding the local market. Today, Portugal represents no more than 15% of our EBITDA. Spain is still important, though the US is one of the most important areas in terms of growth.