Vector Cuatro to acquire Windfor S.r.l. and grow in technical advisory for wind farms
Falck Renewables S.p.A. signed today an agreement through its wholly-owned subsidiary Vector Cuatro S.r.l. to acquire a 100% share of Windfor S.r.l, a well-known leader in Italy in technical advisory services for wind energy. This reinforces Falck Renewables’ upward trend and strategic interest in the services sector for renewable assets.
The acquisition is expected to be finalised by September 2018 and is worth 0.625 million euros.
Through this acquisition, Vector Cuatro strengthens its offer in technical advisory services for onshore wind plants, a technology expected to continue to grow 7.2% from 2015 to 2030 globally according to the IEA.1
With over 15 years’ experience, Windfor is a leader in Italy in the resource assessment, planning, decommissioning and repowering of wind farms. Windfor has analysed over 17 GW of wind plants, performed due diligence for 9 GW and delivered advisory services in projects for 18 GW in Italy and abroad. Through hands-on experience in a wide range of projects, Windfor also developed advanced proprietary software for anemology analysis.
‘We’re excited about this agreement’, said Vector Cuatro’s CEO Javier Asensio. ‘Windfor will bring significant know-how in the wind power industry, at a time when new plants are expected to be built for over 50 GW every year until 2040, according to the International Energy Agency. On top of new plants, great opportunities will result from repowering old plants or lengthening the lifetime of existing ones’.
Falck Renewables S.p.A., listed on the Italian stock exchange in the STAR segment (“FKR.MI”) and included in the FTSE Italia Mid Cap Index, develops, designs, builds and manages power production plants from renewable sources, with an installed capacity of 970 MW in 2018 (933 MW according to the IFRS 11 reclassification) in the United Kingdom, Italy, United States, Spain and France, using wind power, solar power and biomass technologies. The Group is a global player in the renewable energy technical advisory and asset management services business, through its wholly owned subsidiary Vector Cuatro, providing asset management services to clients accounting for approximately 2.4 GW of installed capacity and with experience in more than 25 countries.
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Vector Cuatro, quality control supervisor of Intipampa PV solar plant in Peru
Vector Cuatro has been working closely with Engie Solar to ensure the quality of Intipampa PV solar plant, located in the Peruvian district of Moquegua and with a power capacity of 40MW.
The firm has supervised the engineering design, the factory acceptant test and has carried out the quality control during the Construction phase and the Commissioning of the plant, with a mixed work team of on-site and back office staff in Spain and Peru.
Intipampa PV solar plant, owned by the French energy company Engie, through its subsidiary Engie Peru, is one of the two projects selected in the national electricity tender held in 2016. Being the second largest plant in Peru, Intipampa PV solar plant covers an area of 322 hectares. It’s expected to provide electricity to 90,000 households in southern Peru.
At the moment, Vector Cuatro has carried out more than 1000 projects in 25 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 2.4 GW of power under management, 4 GW in financial advice and owns a track record of 22 GW throughout the entire value chain of the projects.
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Mexico remains committed to renewable energies and announces the rules of its fourth long-term electric auction
On March 28, 2018, Mexico’s Energy Regulatory Commission (CRE) and National Center for Energy Control (CENACE) launched the bases of the fourth long-term renewable energy auction in Mexico.
This will be the first long-term auction administered by the Mexico’s Energy Regulatory Commission (CRE) as the previous three auctions were administered by CENACE. The publication of the final version of the auction rules will be published on May 30, once the questions and clarification period ends.
Submission of the prequalification application for sale offers will be done on Aug. 21st-22nd and the delivery of the economic proposals of the sale offers on Oct. 17th and 22nd. The results of the auction will be announced on Nov. 2nd. As in the previous auction, prequalification requests must be validated by an independent expert.
Vector Cuatro has actively participated in the three renewable energy auctions held so far as independent expert for over 200 projects and providing also commercial and financial advice (including the construction of financial models and sensitivity analysis), previous technical due diligence studies of project portfolios, and annexes for electricity coverage contracts. Specifically, Vector Cuatro has analyzed 10 GW of projects, of which 2.6 GW were awarded to its clients and has strategically advised and prepared financial models for the auctions for a total of more than 15 projects.
Vector Cuatro is present in Mexico since 2013, providing asset management services, construction supervision, and technical and financial advice. Its 88 MW portfolio under management includes some of the first utility-scale photovoltaic projects operating in the country, developed under the schemes of ‘Pequeño Productor ‘ and ‘Autoabasto’. In addition, to date Vector Cuatro has participated as Owner’s Engineer and Independent Engineer in the construction and commissioning of five projects for a total of 180 MW, of which three are already in operation. Also, and in relation to financial and transaction services, Vector Cuatro has participated in the acquisition and sale of photovoltaic projects under the schemes of ‘Pequeño Productor ‘ and ‘Autoabasto’, analyzing a total of more than 600MW, has advised on operations with Contracts Private Supply, has acted as an independent expert in courts and arbitration and has provided financial modeling services in many of this operations.
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Vector Cuatro joins ASOLMEX and AMDEE
Vector Cuatro enhances its presence in México and joins ASOLMEX (Asociación Mexicana de Energía Solar) and AMDEE (Asociación Mexicana de Energía Eólica), the largest associations of renewable energy in the Mexican market.
ASOLMEX and AMDEE were established with the aim of promoting the development of renewable energies in Mexico. As new member of ASOLMEX and AMDEE, Vector Cuatro expect to strengthen its presence in Mexico and Central America generating new business opportunities.
Vector Cuatro is present in Mexico since 2012, providing asset management services, Construction supervision and Financial and Technical advisory. Vector Cuatro’s 88 MW portfolio under management includes some of the first ‘utility-scale’ PV projects in operation in the country, developed under the ‘Pequeño Productor’ and ‘Autoabasto’ schemes.
Mexico has become one of the key markets for Vector Cuatro. There, the company has participated as Technical and Financial advisor in the three renewable energy auctions held so far, totaling 2.8 GW awarded for its clients.
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Vector Cuatro, advisor on the selling of a 40,8 MW portfolio in Spain
VC Transaction Services team has worked as sell-side transaction advisor, since the initial structuring (June 2017) until the final closing (November 2017), of a 40 MW operational PV portfolio consisting of 7 PV Plants located around the Spanish territory.
Vector Cuatro has provided advisory services during the selling process of the portfolio leading the transaction from the investors scouting, the preparation of all transaction documents, the coordination of the DD process with potential buyers, the communication with bank and the negotiation and closing of the terms and conditions under the Sale and Purchase agreement.
By mid-June, the Transaction Services team received the mandate to launch and lead the selling process that finally took place last November 20th for a final amount over 70 million Euros (Enterprise Value).
Engagement between the seller and Vector Cuatro started back in October 2016, when VC Transaction Services was appointed as the financial advisor to raise non-recourse financing for the whole portfolio which was finally closed in April 2017.
Since its foundation in 2007, Vector Cuatro has been a leading advisor in the renewable energy transactions (selling and acquisitions) as well as in the financing and refinancing of renewable energy projects worldwide, taking as a competitive advantage its knowledge of the main players in the sector and its experience in the management of renewable energy facilities.
Through its three service lines (Asset Management, Engineering and Transactions), Vector Cuatro has carried out more than 600 projects in Europe, America, Asia and Middle East. It has over 1.7 GW of power under management, 4 GW in financial advice and counts with a track record of 22 GW throughout the entire value chain of the projects. In September 2014, the company was incorporated into the Italian Falck Renewables Group (FKR.MI), a leading player in the European renewable energy industry and listed at the Milan Stock Exchange.
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Vector Cuatro, advisor on the selling of a 5 MW operational PV plant in Spain
VC Transaction Services team has worked as the sell-side transaction advisor on the selling process, since the initial structuring (June 2017) until the final closing (October 2017), of a 5 MW operational PV project located in Albacete (Spain).
Vector Cuatro has provided advisory services during the selling process of the project (5MW, Albacete) leading the transaction from the investors scouting, preparation of all transaction documents, coordination of the DD process with potential buyers, communication with the bank and negotiation and closing of the terms and conditions under the Sale and Purchase Agreement.
At the end of June, the Transaction Services department received the mandate to launch and lead the selling process that finally took place last October 11th for a final amount over 30 million Euros (Enterprise Value).
Since its foundation in 2007, Vector Cuatro has been a leading advisor in the renewable energy transactions (selling and acquisitions) as well as in the financing and refinancing of renewable energy projects worldwide, taking as a competitive advantage its knowledge of the main players in the sector and its experience in the management of renewable energy facilities.
Through its three service lines (Asset Management, Engineering and Transactions), Vector Cuatro has carried out more than 600 projects in Europe, America, Asia and Middle East. It has over 1.7 GW of power under management, 4 GW in financial advice and counts with a track record of 22 GW throughout the entire value chain of the projects. In September 2014, the company was incorporated into the Italian Falck Renewables Group (FKR.MI), a leading player in the European renewable energy industry and listed at the Milan Stock Exchange.
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Javier Asensio, new Head of Vector Cuatro Business Unit (CEO)
Javier Asensio joins the company as Head of Vector Cuatro Business Unit, therefore assuming the ultimate responsibility for the group’s business.
Javier has more than seventeen years of experience in activities of engineering and project management, and more than ten years especifically in the renewable energies’ industry. Javier’s experience is wide both in terms of competences and of jurisdictions, having worked in the investment, construction and management areas of more than 500 MW of solar and wind projects in the United Kingdom, Spain, France and India.
Before joining Vector Cuatro, Javier has served as Chief Operating Officer at Quercus Investment Partners, and has occupied other management roles at OST Energy, Proener and Indra Sistemas. Javier is MSc Engineer from Valencia Technical University (Spain) and holds an MBA from the International Institute for Management Development (IMD) in Lausanne (Switzerland).
Read MoreVector Cuatro, global support in a 30 MW solar PV project in Mexico
Camargo is a 30 MW solar PV project located in the Mexican state of Chihuahua in which Vector Cuatro has provided services through its three business lines: Asset Management, Transactions and Engineering.
The project, connected on April 6th, has been developed by the ‘Pequeño Productor de Energía’ scheme and has become one of the biggest PV operational projects in Mexico.
During the 8 months that the construction phase has lasted, Vector Cuatro has carried out the supervision, verifying that the highest quality standards in PV market were followed. The project has been funded entirely by Balam Fund I, L.P. and BalamCK16; private equity funds specialized in the investment of renewable projects in Mexico and managed by Balam.
Thus, Vector Cuatro has supported Balam through its three business lines including, among others, the origination of the opportunity, the Technical Due Diligence and the support in the selection of the main contractor. Camargo is the first project under management that joins VC portfolio in Mexico.
Vector Cuatro entered the Mexican renewable energy market first in 2012 as Technical Advisor for solar PV plants in Latin America, providing since then services throught its other business lines. The range of services has been adapted to the great variety of clients which comprise investment funds, financial institutions, international sponsors and developers, amongst others. Currently, Mexico has become one of the key markets for the company that has increased its activity in the country due to the two renewable auctions that were held in 2016.
PMGD’s an attractive option for project development in Chile
The Chilean Energy Market has been leading the renewable revolution in the Latin America region. About a decade ago, it was driven by the high spot price in the Chilean electrical grid. The first projects were financed under a merchant scheme; however, due to the high volatility and the considerable decline in prices over time, the banks stopped financing under this structure. Therefore, renewable generators began to look to power purchase agreements (PPA) in the private sector and at the public tenders. In the past years, there have been some examples of private PPAs between renewable generators and big consumers such as Santiago`s Subway or the Google Data Center in Santiago but because of the inherent challenges of the renewable generation to supply a load base consumption, this market is still moving at a slow pace. The 2016 Chilean Public Tender draw the attention of everyone in the sector by its low-price results: setting a momentary record for the lowest price in solar at 29,1 US$/MWh and an average price of 47,6 US$/MWh. These results left the awarded companies with a big challenge to finance and build their projects at very competitive prices and a target date by 2021. However, after the big success of the tender, the Chilean renewable market seems to be slowing down instead of picking up its pace.
On the meantime, a new market is rising as an attractive opportunity: distributed generation, driven by a regulation that presents some aspects different from those normally used in other countries. As a matter of fact, the Government Decree 101 presents the concept of Small Generation Means “PMG” (from its acronym in Spanish, Pequeños Medios de Generación) and Small Distributed Generation Means “PMGD” (from its acronym in Spanish, Pequeños Medios de Generación Distribuida); both with particular characteristics.
The PMG are projects with installed capacity up to 9 MW, and are connected to the main transmission, sub-transmission or additional transmission grid. PMG projects that are over 3 MW must obtain an Environmental Impact Declaration “DIA” (from its acronym in Spanish, Declaración de Impacto Ambiental). For projects that are under 3 MW, the DIA is not mandatory, which will considerably reduce the development time and investment at the project Capex.
A PMG project using non-conventional generation will be able to request to the grid operator a “self-dispatch” operation scheme, which means that the project is guaranteed to automatically connect to the grid and not to be curtailed. Once declared the “self-dispatch” operation option, it shall be maintained for at least 12 months.
Any project connected to the transmission grid must pay for transmission tolls (1), but for non-conventional generation PMG partial or total waivers may apply in accordance to the grid operator instructions. Furthermore, a PMG project can sell its energy to the system at the marginal cost or at a stabilized price regime. The stabilized price is a theoretical price that can be understood as an approximation of the short and long term energy market prices, where:
- Short term price will consider the weighted value of all PPAs currently operating in the market and
- Long term price for the weighted average over time of the spot market prices for the next 4 years.
The potential variation of both prices are stabilized by a band mechanism, defined on the Art. 168 from the Decree “DFL-4” (2) (from its acronym in Spanish, Decreto de Fuerza de Ley), hence its “stabilized” denomination. The price is calculated every 6 months by the National Commission of Energy “CNE” (from its acronym in Spanish, Comisión Nacional de Energía), and the methodology used for its calculation grants stability over time and in each period-to-period calculation to the generators energy injection valorizations.
On the other hand, the PMGD are also projects with installed capacity up to 9 MW, but unlike the PMG, they are connected to the distribution grid or to installations of a company that owns electric power distribution lines that make use at least partially of state property. PMGDs have the same characteristics as PMG projects, they can be “self-dispatch”, get transmission toll reductions, have access to the stabilized price regime and do not need to have a DIA for projects under 3 MW.
In order to avoid any disconformity with the distribution grid owner, the process to connect a PMGD to a distribution network is well defined by the PMGD Connection and Operation Technical Standard “NTCO” (from its acronym in Spanish, Norma Técnica de Conexión y Operación de PMGD), a summary (3) of such process will be as follows:
- The distribution company receives in writing a request to connect, and the background information of the project is presented through the form called Request for Information “SI” (from its acronym in Spanish, Solicitud de Información).
- Distribution company provides the general information about the facilities that are necessary for the connection and operation of the PMGD project, existing projects and their status of Network Connection Request “SCR” (from its acronym in Spanish, Solicitud de Conexión a la Red) for all feeders in the Distribution Substation’s feeder where the application was filed.
- Once the connection point has been defined, the project owner should submit to the distribution company the SCR, containing in more detail information about the project itself and its equipment.
- After receiving the SCR, the distribution company provides enough in-detail information about the distribution feeder so that the PMGD owner can develop the System Impact Studies, a set of electrical studies showing the impact to the distribution network of the generation project.
- Once developed, these studies are delivered to the distribution company within a certain timeframe. To address any concerns between the project owner and the distribution company a Q&A and revision process starts, until agreement is reached.
- The distribution company has up to three months since the moment the in-detail information is provided to the project to issue a Connection Criteria Report “ICC” (from its acronym in Spanish, Informe Criterio de Conexión), which informs the final agreement or disagreement with what is proposed in the SCR.
- In the event that the distributor does not accept the SCR, the project owner may challenge the correction to the delivered reports for an additional review round; or it can start a new process, by suggesting another connection point or change the characteristics of the project.
- If the SCR is accepted through a favorable ICC, the permit grants the PMGD project the right to interconnect to the distribution grid in 9 months, with the possibility of renewal of the time for Solar and Wind technology for 9 additional months.
A particular case that arises while evaluating the SCR is when the project owner presents a project that will inject up to 1,5 MW and the project is considered to have Non Significative Impact “INS” to the grid (from its acronym in Spanish, Impacto No Significativo). This project will not require additional works or electrical studies. The information that should be submitted is the following:
- Power flow of the feeder (in MW) compared to the design capacity of the feeder;
- The short-circuit to power ratio to determine the impact on the voltage of the feeder;
- The contribution of PMGD to the short-circuit current of the primary distribution substation and the distribution grid; and
- Compliance with the protections coordination.
Although the permitting process is very well defined in terms of periods for document delivery and evaluation, it may seem complicated to someone that is unfamiliar with it and counting with a partner specialized in the market can greatly ease the process.
A standard practice in the market is to group these projects to make them more attractive for investors and to be able to achieve financing. Projects subject to the stabilized price scheme have already been successfully financed by multilateral banks and Chilean commercial banks, setting a precedent in the Chilean energy market, placing the PMGDs as the new viable option for developers and investors in Chile.
(1): The transmission tolls payment by generators is a scheme that was recently changed by the new transmission law (Ley 20936), and a transition period has started over which all transmission tolls will be pay by the consumers of the electrical grid.
(2): DFL 4 Can be found on the following link: http://www.sec.cl/sitioweb/transparencia_activa/julio2010/DFL_4_20018.pdf
(3): For the official process scheme, refer to the Chilean Electrical Superintendence web page: http://www.sec.cl/portal/page?_pageid=33,6449714&_dad=portal&_schema=PORTAL
Read MoreVector Cuatro enhances its presence in Middle East by opening a new office in Dubai
The Spanish multinational opens a new office in the United Arab Emirates as a new regional hub for its activities in Middle East and to further strengthen its international presence.
The new office is located in Dubai, concretely in the Dubai World Trade Center, where the local team has been operating since a few weeks. This new location joins the local delegations that the group has at present outside of Spain, namely in Italy, France, Bulgaria, the United Kingdom, Japan, Mexico and Chile.
In 2017, as part of its international expansion, Vector Cuatro has focused its services on several countries in Middle East, where the company has worked during the last couple of years. Vector Cuatro will continue rendering technical services in the region; engineering and commissioning services, technical advisory and owner´s engineering, among others. Additionally, Vector Cuatro expects to start providing asset management services very soon.
Furthermore, on April 25-26 Vector Cuatro will be participating in MENA New Energy 2017; one of the MENA’s largest renewables summit.
Currently, Vector Cuatro has carried out more than 600 projects in 22 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 1.7 GW of power under management, 4 GW in financial advice and counts with a track record of 16 GW throughout the entire value chain of the projects. In September 2014, the company was incorporated into the Italian Falck Renewables Group (FKR.MI), a leading player in the European renewable energy industry and listed at the Milan Stock Exchange.
Vector Cuatro UAE
Sheikh Rashid Tower, Level 7, Office 11.
Sheikh Zayed Road, Dubai World Trade Center.
Dubai, UAE
Tel: +971 4 309 7058