How much capacity does Enerray serve on the O&M side in Italy?
Enerray manages over 710 MWp in Italy and has recently been certified, by a renewable energy research and consultancy firm, as the first Italian O&M operator. In 2019, we have already taken over more than 210 MWp from two top players.
What are the current O&M challenges and opportunities specific to Italy?
Until now, we’ve talked about management and maintenance activities, particularly in relation to existing PV park, and therefore to all the activities on the installations connected over the years with incentives, many of which were carried out without paying particular attention to maintaining performance over time. These are plants that today still suffer from problems with important repercussions on the business plan and that, therefore, become opportunities in which operators who have their core business in the technical management of PV systems, providing services, such as routine maintenance, monitoring, revamping and repowering, video surveillance and component care, can show their skills.
But O&M is not only this: If on the one hand, many PV systems in Italy are not working at the top of performance requiring targeted interventions, on the other, the management and maintenance market is going through a decidedly dynamic period on different fronts. New entries, acquisitions, displacement and concentration of large portfolios, and opportunities from new installations are just a few examples. Unlike what happened in the past, when O&M was often neglected, today investors consider it a priority to rely on operators that are able to guarantee quality services to protect the investment over time. The owners of PV plants are also more skilled in O&M issues than in the past, and look at the offered services with more attention. This situation, joined with a decline in O&M prices, has generated a lower number of players in the Italian O&M market, opening opportunities to the companies that have proven to be stronger in terms of quality and reliability.
What sets Enerray apart from other O&M companies?
Enerray is not only an O&M operator, but also an EPC contractor with 12 years of experience, able to manage all aspects of the engineering, procurement, construction and commissioning of a PV plant. So we can combine technical experience of both. In this context, we can offer our Italian excellence and innovation, by installing projects with high standards of design, attitude to problem solving and flexibility, and global experience, proven by over 800 MWp installed and under construction worldwide. We underline 33 MWp built in Jordan and 116 MWp under construction in Egypt, part of the Benban Solar Park, the largest private-sector financed PV Park in the Middle East and North Africa.
Moreover, we are part of the Maccaferri Group, an industrial corporation active since 1879 and with a turnover of over €1 billion, a guarantee of solidity and reliability over time.
How has your new structure, including Trouble Ticketing and the Performance Specialist, performed in the last year?
At Enerray in particular, we are enhancing routine maintenance – a very important service that we manage with highly qualified personnel, innovative traceability and historicization systems that allow us to constantly monitor activities and PV plants. In this way, we can reduce extraordinary maintenance activities by amortizing costs and keeping the PV plants on optimal standards.
The Trouble Ticketing software for fault management, combined with the figure of the Performance Specialist, has instead allowed us to have a wider database and make specialized diagnoses on the main causes of failure, developing proposals for improving performance.
Turning to your EPC operations, how much capacity have you already built in Italy? What is your pipeline for 2019 and 2020?
In Italy, we are a market leader with more than 240 PV systems built for a total capacity of about 160 MWp. Actually, we have a pipeline of 36 MWp under construction and many MWs under development in Southern Italy. Enerray is also one of the biggest EPC contractors in the world for rooftop PV plants, with more than 180 PV plants installed on the rooftops of commercial and industrial buildings. In our client portfolio, we have important brands like Ferrari, Max Mara, Eni, Edison, Auchan, Leroy Merlin, SCIC, Ghella and many others.
Are you mainly focused on the large-scale or C&I segment? What are the challenges and opportunities specific to each?
We are focused on both, but in this period we are mainly building large ground mounted PV plants, and we are developing “utility scale” solar PV systems. Thanks to the reduction of the cost of many solar PV components, we are also signing many contracts with private companies, especially in the center and north of Italy, for installations on rooftop and shelters. We think that many industr owners should be more informed about the advantages of installing a PV plant, which nowadays has a very interesting return on investment, especially for energy intensive companies.
Regarding ground mounted solar PV plants, one of the main challenges in the Italian PV market is the availability of land, because Italy does not have the same amount of surface area available to develop large-scale plants. The low availability and high costs of land, coupled with complex approval processes, prove to be a significant barrier for solar development. Moreover, even if Italy has reached grid parity, the development of utility scale solar requires some form of a PPA under more stable market regulations, in order to guarantee good returns and attract investors.
With the imminent approval of the Decree FER 1, which will create a clearer structure for the set of rules for solar auctions and feed in tariffs for PV plants under 1 MW, particularly for self-consumption systems, the Italian solar PV market should receive a boost, both for C&I and large scale PV systems.
Currently, the residential segment drives the Italian PV industry. To achieve its goals, the large-scale segment must see more development. What is your experience here? How could the Italian landscape be improved?
Enerray is focusing its resources on developing grid parity plants in Southern Italy, particularly in the Sicily region. The development process is not simple and must be managed by companies and/or developers with experience behind them and industrial references of a certain level who have the ability to follow the project in its entirety. On the market there are companies that have neither competence nor experience in this field. To this end, it would be useful to block the authorization market.
Another issue concerns the permitting process. In the whole of Southern Italy, the permitting process for grid connections on a local level has proved to be a major bottleneck. Consequently, this causes frequent problems related to project permits, both in terms of lead time and total volumes. Regions should be more cooperative in this sense, trying to speed up the authorization process.
Since this new involvement in Sicily means large-scale PV, can you provide some details of this new PPA contract?
In Italy, PPAs are being studied, above all, as a support tool for FTV investments in grid parity, in order to mitigate market risk and to keep cash flow at a stable level. In this sense, a PPA is a tool for sharing the typical risks of production from renewable sources (price, volume, balance, counterparty, credit, legal) between the counterparties that stipulate it.
In the current state of Italian regulation, the structure of the PPA that is having the most interest from stakeholders is the one that foresees the sale of FTV energy for a typically five to 12 year period to a trader against a “guaranteed” price identified by a more or less complex structure.
The Italian Government has recently revised its 2030 solar target to 50 GW. What is your opinion of this? Is it enough? Is it achievable?
In Italy in 2018, a total of 435 MWp of new plants were installed for a cumulative capacity of 20,117 MWp. According to most of the operators and sector experts, price stability and the implementation of the new FER Decree will push growth and favor the installation of around 600 to 1,000 MWp of PV plants in 2019. The goal is to reach at least 32% of energy in gross final consumption from renewable sources by 2030, therefore, with a clear regulation in concert with the bodies involved and able to incentivize investments, especially in favor of large-scale solar power plants, PV can easily reach 50 GWp.