After years of successful clean energy production across the globe, Voltalia launched its first ESCO project in Myanmar in 2018, working closely with MNTI. Since its creation, the leading energy firm is very active in Latin America. Recently it has inaugurated the Oiapoque power plant (Brazil), serving the off-grid city with a mix of energy sources. In this interview, Michel Faivre, Key Accounts Director at Voltalia, shares with TowerXchange the company’s plans to serve telecom players across CALA and an overview of its projects and strengths.
TowerXchange: Could you please re-introduce Voltalia and yourself to our CALA readers?
Michel Faivre, Key Accounts Director, Voltalia:
Voltalia is a French renewable energy producer with a total capacity of 921MW either in operation or construction worldwide as of today. Voltalia is also a service provider, assisting its investor clients active in renewables at each project stages, from conception to operation and maintenance. We’ve been active for more than fourteen years and run operations in eighteen markets across Europe, Africa, Asia and the Americas. Our mission is to improve the global environment, by reducing the use of fossil fuels, but also to foster the local development in each country where we operate.
Four years back, we decided to enter the telecom sector and help operators and towercos with their energy management needs, especially moving from fuel to green energy, and since then, we’ve successfully launched an ESCO project in Myanmar, one of the most challenging and dynamic telecom markets in the world.
With regards to Latin America, we have leading positions in wind production in Brazil, with 724MW currently in operation or construction and in French Guyana, where we are active in hydro, biomass, solar and storage. To date, we employ more than 120 people in the region and we already have local teams in Mexico and Colombia.
TowerXchange: Please describe the different business models offered by Voltalia.
Michel Faivre, Key Accounts Director, Voltalia:
At Voltalia, we offer various business models that can flexibly adapt to the requirements of our customers. We operate under three main models for telecom operators: 1) the energy as a service (ESCO) model 2) the private Power Purchase Agreement (PPA) model and 3) the Net Metering solutions model.
Currently, we are investigating the needs of telecom players across LatAm, and among the various models we offer, we are assessing which one is the best for them.
One key finding is that the situation in CALA is quite different from other regions where gensets are the main source of energy for many sites, hence the need for a pure ESCO proposition.
In fact, since the quality of the grid across LatAm is generally good, the ESCO model might not be the appropriate one but what we are sure of is that MNOs are keen to shift to greener sources of energy. A good approach to offer could be a mix of ESCO and PPA or pure private PPA.
The bottom line is that, at Voltalia, we are able to effectively offer and manage all these models.
TowerXchange: Can you tell us more about the Brazilian power plant that Voltalia recently completed?
Michel Faivre, Key Accounts Director, Voltalia:
In Brazil, we have many ongoing projects in wind, but one recent project is truly illustrative of our know-how in off-grid: Oiapoque.
Oiapoque is home to 24,000 inhabitants and not connected to the national electricity grid. In 2014, we won a tender with plans to produce electricity using a 12MW thermal unit, that is already in operation since 2015, and a 7.5MW hydropower plant to be built by 2021. In 2018, we have commissioned a 4MW solar unit, in addition to the existing program.
This solar plant is optimising the existing infrastructure and operating costs of the plant by reducing the use of diesel fuel for electricity generation.
In the long run, Voltalia will provide electricity to the entirety of this isolated city thanks to a 90% renewable production. Of course, we build, operate and maintain all of these plants.
TowerXchange: What are the requirements of telecom players across LatAm? What can you tell us about the initial conversations you are having in the region?
Michel Faivre, Key Accounts Director, Voltalia:
We have initiated several promising discussions with MNOs and towercos across the region. All of them are very interested to find out more about new approaches and models that can optimise energy management operations, but they aren’t sure yet on how to proceed. My perception is that most players would be happy to outsource the majority of their operations to experts and this is where Voltalia can surely help them.
TowerXchange: What is Voltalia’s competitive edge?
Michel Faivre, Key Accounts Director, Voltalia:
Voltalia is a renewable energy company, this is what we do and what we are good at. We have a strong track record across multiple geographies and an in-depth knowledge of the sector, its dynamics and requirements. We are experienced in any source of renewable energy such as solar, hydro, wind, biomass as well as hybrid sources.
Our company already enjoys a solid presence across Latin America and a deep understanding of its markets and regulatory environments. Additionally, we have strong ability to finance and invest as required by PPA projects. We’ve already succeeded at it in Brazil, Mexico and Colombia among others.
Lastly, we’ve launched our ESCO project in Myanmar in 2018 and for that, we are working with towercos, which has given us a strong understanding of their requirements and business model.
TowerXchange: Can you share further details with regards to the regulatory challenges applicable to renewable energy projects?
Michel Faivre, Key Accounts Director, Voltalia:
Much depends on the type of model we select. The ESCO model is not very regulated yet so we don’t encounter too many issues. On the other hand, the private PPA one is a lot more complex and requires us to analyse the applicable rules in each market. In some cases, like Brazil, we need to take into consideration that the permit to manage utilities is granted for each individual state (due to the fact that Brazil is a federal republic).
With regards to the net metering option, this is a very interesting model that allows the surplus of produced power to be reinjected into the grid and provides a rebate in return. This is a very efficient model, but some countries don’t actually allow it.
Thanks to our long-standing global experience, we are also able to liaise with regulatory bodies and offer consulting services to our customers. Discussions with the regulators can be quite complicated and touch upon sensitive issues and Voltalia can play a great problem-solving role.
TowerXchange: What are the key challenges and opportunities of the Myanmar project?
Michel Faivre, Key Accounts Director, Voltalia:
Myanmar is a great example of our ability to overcome complicated situations. Due to its weather and the presence of heavy rain season, we couldn’t adopt a 100% solar model and we also had to take into consideration some crucial logistics and operational challenges.
One of the main concerns was to find trained staff to employ and to begin with, we had to find foreigners willing to take on the challenge. We also had to understand the complexities related to taxation, import of goods, foreign investments versus the use of local currency.
We are very glad to be working in Myanmar, which has proven an extremely receptive market and a very positive venture for us. But the challenges we faced and continue to deal with are considerable. Possibly one of the most complex one is the fact that MNOs and towercos operate under pass-through contracts whereby the MNOs pay a base fee for the initial investment and the maintenance and a pass-through fee (for the cost of the energy actually issued) to the towercos and we are now helping out our towerco customers to restructure the contracts to better serve the dynamics of the renewable ESCO model.
