Making wind power work for Latin America
Danish wind energy company Vestas is the largest of its kind in the world, and is set to expand further in emerging markets. Energy Digital caught up with Fransisco Ruiz, Head of Business Development in Latin America, to find out more.
“Vestas has more experience than anyone else in making wind work,” says Francisco Ruiz, Head of Business Development in Latin America. Over the last 37 years, the Danish wind turbine manufacturer has expanded its operations to become a world leader in sustainable energy solutions. Operating across 30 markets in 77 countries, Vestas products represent over 17% of the global installed turbine base. Ruiz reflects on Vestas’s position as an industry leader, and the ways in which the green energy giant is seeking to expand its foothold in emerging markets, as the renewable energy sector continues to gain traction across the globe.
With a total of 11 years in the energy sector, Ruiz came to Vestas in 2009, following a role in corporate finance at Spanish multinational Abengoa. A Spanish national himself, Ruiz reflects: “I have had different managerial positions including Executive Advisor to the Presidents in Southern Europe, MENA and Latam regions. During this time, I had a strong focus in new markets, so my current role was a natural path.” He claims the role of executive advisor to Vestas’ President of South Europe helped to grant him a “holistic approach… focused on execution” which he is using to approach new challenges posed by the Latin America region. “I intensively worked on strategy, organisation, culture change, leadership and new markets,” he adds.
A world leader since 1986
As a company, Vestas has a strong pedigree of pioneering work in markets only just opening their doors to the possibilities of wind power. Back in 1986, Vestas installed the first ever wind turbine in Greece, on the southern island of Mykonos. Ruiz says his experiences at Vestas, learning from the company’s long history of creating thriving markets where none existed, have “helped me set up a clear strategy in Latam”.
“With 90GW of wind turbines in 77 countries, we have installed more wind power than anyone else,” says Ruiz, who puts the company’s impressive track record down to the its commitment to working in close partnership with customers to offer the most effective solutions towards energy independence. He adds: “Through our industry-leading smart data capabilities and unparalleled 76GW of wind turbines under service, we use data to interpret, forecast, and exploit wind resources and deliver best-in-class wind power solutions.”
In addition to industry-leading technology, Vestas maintains supremacy in the renewable energy sector by virtue of a powerful, motivated workforce. “Employees are crucial to staying competitive and providing customers with the best service,” says Ruiz. With over 23,000 staff on Vestas’s books (almost four times that of its next-largest competitor, Chinese company Xinjiang Goldwind) the company is able to attract, employ, reward, develop and retain the best. Ruiz emphasises: “We are also dedicated to continuous improvement of competences. We do that through a variety of internal learning possibilities as well as career development and opportunities.” Vestas is firm in its commitment to foster an inclusive and diverse environment to attract employees of different nationalities, and with the company ranking at 43 on Forbes’ Global 2000 Multinational Performers list, it must be noted that its 23,300 employees are helping to build a more sustainable world.
Vestas in Latin America
Now, Ruiz is overseeing the firm’s newest expansion, bringing its bright future to the Latin American market and expanding an already impressive global footprint. “We are pioneers and it is part of our DNA,” says Ruiz, but why Latin America? “Today the region represents a recurrent volume that makes an attractive market for the company.” Highlighting the progress his initiative has already made in the region, he adds: “Currently we have installed more than 4GW in Latin America, leading the market share of most of the countries where we operate.” This strong development trend is set to continue. “2017 was an excellent year. Within the Latam region, we have secured orders for more than 1.2GW.” This success, Ruiz explains, “is the result of many years of hard working, and deep understanding of our customers’ needs and the markets where we compete. This has been also supported by an extraordinary, passionate team.”
Of course, the Latin American region is a far cry from Vestas’s home market of Denmark. “It differs in many ways,” Ruiz admits. “The regulation in both countries and the decision criteria of our customers are some of the main differences.” While emerging markets are becoming increasingly receptive to the possibilities of sustainable energy solutions, the Latin American market still has a lot of room to grow in comparison to Northern Europe. “Denmark is a global reference using wind energy efficiently. More than 40% of the energy consumption comes from wind.” These differences lead to challenges for a foreign company entering the market. Ruiz explains: “Auctions are the predominant way of competing in the different Latin America markets. These allocation systems normally increase the pressure on prices and are not necessarily technologically-driven. Maintaining profitable growth levels is probably one of the main challenges for the entire renewable energy systems industry.”
Ruiz remains confident in Vestas’s ability to rise to the challenge. “At Vestas, innovation, time to market and forward selling are key elements to continue leading the industry in such challenging conditions. Markets evolve really fast – anticipating these changes, and positioning Vestas in a good place to compete in the near future, is part of my daily challenge.” Working for a company with an industry-leading brand, and the resources to support its aims, means Ruiz is committed to “being part of the changes, bringing them about, and leading them instead of waiting for someone else do the job for us.” Plans and strategies that “help deal with the ambiguity of such a role as mine,” Ruiz reflects, include “interacting with governments, developers and customers and actively promoting the use of renewable energy”.
Focusing on provisioning the socio-economic and political change it wants to see in these emerging regions is proving successful for Vestas. Its Latam installed base grew by over 25% last year, and Ruiz expects the trajectory to continue. “Anticipating the markets and customers’ needs is essential for success. We have a strong knowledge of the wind in Latin America and, together with the increase of the efficiency of our products and being more competitive and modular, it helped us maintain our leadership position in the region.” In addition to Brazil, Argentina and Mexico, which Ruiz says are the countries with the biggest potential regarding volume of sales and size of installed base, Vestas is also eager to move into the Columbian renewables market, which he enthuses “will also be an interesting country in the coming years”.
The way the wind is blowing
The next five years look to be exciting for the Danish wind giant. “The company is evolving very fast to adapt to the changing market conditions,” Ruiz comments enthusiastically, outlining plans for the near future. “We will continue working to reduce the cost of energy for our customers. New turbines, hybrid solutions, storage, local productions and multi-brand services will be part of our offering.”
Being a worldwide industry leader means Vestas is – as shown by its operations in Latin America – poised to effect change, keeping itself at the forefront of where the company wants the world’s turbine markets to grow. “The renewable industry will continue developing new markets and gaining ground,” says Ruiz. “We will see the integration of different technologies as unique solutions (wind and solar), and storage will play a key role in electricity generation over the coming years.”
The prevailing winds of the energy sector are undoubtedly blowing towards a greener, more sustainable future. With Ruiz overseeing new, growing operations in Latam, and over 1.2GW worth of orders already placed with the company this year, Vestas is in an ideal position to shape the landscape of wind power for years to come.
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere