Mar 29, 2023
EDP CEO Says Europe Isn’t Investing Enough in Renewables
(Bloomberg) -- EDP-Energias de Portugal SA said Europe isn’t investing enough in renewable energy and should do more to speed up the permitting process, interconnections and reduce bureaucracy.
“We should be investing at three to four times more the pace that we were over the last couple of years,” Chief Executive Officer Miguel Stilwell de Andrade said on Wednesday in a Bloomberg Television interview with Alix Steel and Guy Johnson in London.
“It’s not just up to the European Commission level, it needs to go down to the member states,” the CEO said. “They really need to be much more focused on making these things happen in the short term. It’s more about execution, rather than what is the vision.”
Portuguese utility EDP already is among Europe’s biggest wind energy developers and plans to invest 25 billion euros ($27 billion) in the 2023-2026 period as it continues adding projects, mostly in North America and Europe. The sweeping tax credits from President Joe Biden’s Inflation Reduction Act — which de Andrade called “one of the most consequential pieces of legislation ever” — are backing the case for more investment in the US.
Read more: European Renewables Giant Says US Subsidies Spur Wind Investment
“It’s really forcing Europe to face up to the fact that it’s not investing enough in renewables,” he said. “The US is going to continue to have this long-term visibility on the tax credits for renewables, and so we can plan ahead for the next decade and accelerate the investment.”
However, the part of the IRA that encourages domestic production may spur a “messy” transition, he said in a separate interview. “It’s not easy to relocate the whole supply chain back into the US.”
EDP on Thursday announced an agreement for US panel manufacturer First Solar Inc. to deliver modules for the Lisbon-based firm’s solar projects in that country.
Meanwhile, guidelines from the European Union on matters such as simplifying permitting haven’t been adopted in most countries, de Andrade said.
“Try to build a wind farm in Germany — it’s an absolute nightmare,” he said.
Read more: Europe Banks on Its €72 Billion to Counter Biden’s Green Payouts
De Andrade doesn’t see a “zero-sum game” between Europe and the US, but “some healthy competition” for investment.
“If it’s attractive in the US, you’ll get investment in the US,” he said. “If it’s attractive in Europe, you’ll get investment also in Europe.”
EDP also divests some projects to generate proceeds for new investments. While the main buyers of those assets previously were infrastructure funds who wanted long-term power purchase agreements, the new acquirers are often energy firms.
“The assets that are most attractive now are some that have merchant components, so they can take advantage of that volatility,” he said.
EDP is currently “in the market” with different projects in Spain, Poland and Brazil, and the company expects to see strong demand and pricing for the assets, he said.
Asked if EDP would be interested in buying any renewable-energy assets that oil companies may put up for sale, de Andrade said his company doesn’t need additional acquisitions.
“Maybe some others might be interested, but we have a very clear path to growth,” he said.
(Adds agreement signed with First Solar in seventh paragraph.)
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