Spain and Italy are European renewables investment hot spots, says CEO, and Mexico really should be too


The zero-subsidy segment of the Spanish and Italian solar markets has hoisted them near the top of the list of most attractive PV locations for a privately-owned renewables investment company which recently launched in London.

Susgen will manage the renewables assets of the real estate and clean energy-focused PP Asset Management vehicle owned by Philip Pels, which has already developed more than 1 GW of renewable energy generation capacity.

The new investment company, which will focus solely on clean energy, is on the hunt for opportunities to further fund the development of big renewable energy portfolios as it bids to expand its more-than-10 GW development pipeline to 30 GW within three years.


And with Europe currently the focus for a company which has developed and sold projects in Ireland, the U.K. and the U.S., Susgen chief executive Mark Jones said Spain and Italy are very much markets of interest.

“We’re very encouraged by the opportunity in Spain and Italy, which we consider zero-subsidy markets,” Jones told pv magazine. “We’re not actively seeking policy support in those markets, the opportunity is there to develop large projects and pipelines.”

Jones said Susgen was also keeping a close eye on France, to see how its public auction process would drive clean energy deployment, but said the first-mover opportunities offered in many solar markets did not apply in Germany. “Germany doesn’t quite lend itself to our business model of early-stage development pipelines,” said the CEO, “we see it as a relatively congested market.”

Mexican promise

Jones was keen to emphasize Susgen could look further afield as well, having invested in solar in the U.S., but mentioned the example of Mexico, where rich solar promise is being hampered by local policy.

“Mexico really should be a phenomenal solar market, with the incredible solar resource there,” said Jones. “But from reading the press, there are clearly issues with the monopolistic nature of the utility market, which means it would be a difficult market for us to invest in. If it were to open up, that would be a very interesting market.”

When asked about prospects for investing in Indian solar, the Susgen CEO – who formerly held the same role at PP Asset Management – cited a “race to the bottom,” in terms of ever-lower solar electricity price tariffs agreed by developers under an aggressive reverse-auction tendering process.

Indian solar price bids

“There has been a lot of speculation about whether some of the bids can be delivered,” added Jones. “India is a market we looked at, it will be probably the second biggest market, behind China, globally, in the future – it’s probably quite close now. We steered away from India because we felt we just didn’t have the right local partners, back in 2016, so we steered towards the U.S.”

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The same hurdle was obvious in China, Jones adding: “Historically, it’s been very difficult for people to access that market unless they have strong local partners but there are signs that territory is starting to open up.”

When it comes to the U.S., where PP Asset Management has already worked with Virginia-based solar developer Urban Grid, the Susgen CEO diplomatically avoided mentioning the current White House incumbent. “We were very excited about the extension of the ITC [investment tax credit for solar],” said Jones. “That gave the industry, as a whole, five years of runway to develop and deploy projects. The slight downside was that, at about the time of the ITC extension, we had the issue of import tariffs on solar panels but the net position of the two policies wasn’t too severe.


“We see, at state level, a whole range of incentives as well. The U.S. needs to be analyzed including the states, which bring forward local subsidies, you need to understand the states and the RTOs [regional transmission organizations]. There is promise in Virginia, Maryland and where the irradiation is higher in some of the Southern states, they are opening up and beginning to be go-to business states.”

The recent decision of the U.K. government to propose the return of solar to a national Contracts for Difference procurement regime was described as “very, very encouraging” by Jones, who said: “We view the U.K., from the policy perspective, as being a very strong opportunity.”

Although the Susgen chief acknowledged the Covid-19 crisis would have an impact on renewables investment worldwide, he said demand for shovel-ready and operational sites still outstripped the number of such projects available to invest in.

Rather, Susgen is targeting early-stage development opportunities and, although Jones was coy about the cash pile at the company’s disposal, he said: “We’re looking for developers with significant pipelines, the projects we invest in tend to be the largest in their territories, ie 50 MW in the U.K. and as big as 100 MW, and even much larger in the U.S. We are not constrained in that respect.”

The threat from gas

As far as the million-dollar question about the attractiveness of renewables versus fossil fuels was concerned, Jones struck an optimistic tone and referred to the first coal-free month in the U.K. since the Industrial Revolution, which was confirmed on May 11, as well as plunging oil and gas prices during Covid-19-driven industrial shutdowns.

“Investment in oil and gas exploration is going to become more difficult,” said the Susgen chief executive, “that means it is going to get more expensive. The relative attractiveness of renewable energy as investment projects is increasing in relation to oil and gas projects. We believe clean energy is on a par in the power sector with coal and gas and will begin to take share away from the conventional oil and gas industry in time.

“The biggest threat to renewable energy isn’t coal, it’s gas. The question is, how is that threat managed? We’re really positive about the net-zero commitment [in the U.K.] Achieving that will require full decarbonization of the energy sector, including gas. We’re going to have to see gas plants come offline.”

Green finance

Throughout this quarter, pv magazine is diving deep into the topic of green finance and what it means for solar industry players, as part of our UP sustainability initiative. Topics will include the European Green Deal, regional growth opportunities, green bonds and the role of the carbon bubble. Stay tuned and get involved!

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