Enel's Rafael González on transmission, PPAs and big data analytics

For our North American Power List, published May 2018, Richard Heap spoke to Rafael González, Head of Enel Green Power North America. He is responsible for the company’s 3+ GW of capacity across the US and Canada. If you’d like to read more of the report, we’ve released an abridged version as a free ebook, downloadable here.

How long have you been at Enel?

I’ve been with Enel since 2003. I started in Spain in a joint venture between Enel and a local utility, and then I moved to Rome to run Enel Green Power’s O&M activity worldwide. In 2014, I moved to Head of EGP for the US and Canada, which is integrated into the global strategy of Enel Group to continue to have green power as the engine of growth as we work towards becoming carbon neutral by 2050.

How important is North America to that growth?

The US has been one of the most important pillars of that growth. We started here with a portfolio of hydro plants in 2000, and have now created a diversified renewables platform.

In 2014, we achieved 2GW total installed capacity, and we’ve now grown to over 4.2GW of operational capacity with a presence in 24 US states and two Canadian provinces. We had a company record 1.2GW installed capacity last year, of which 1.1GW was wind, and we plan to grow at this pace in the coming three years. This means total investment of around $4bn over the next three years.

How key is your partnership with Tradewind Energy?

We’ve been working with Tradewind for many years. We co-develop projects and then Enel Green Power builds and operates them. In this partnership we’ve built about 3GQ of capacity, and we have partnerships with other local developers too. For example, we just entered Illinois with our Hill Topper projects with Swift Current Energy.

The other notable part of your strategy is corporate power purchase agreements, where you have deals totalling 1.2GW currently in place. Why are these so important?

We started in this market with Google, and we have now signed nine deals. What are we offering to these customers?

First, competitive pricing so they consider that this makes economic sense to them while contributing to the sustainability goals achievement. We also offer customised solutions: we have signed now with some very diverse customers with different needs. And we are offering stability in terms of the cost of energy, so no volatility. It’s a kind of hedge for them.

How can you open the PPAs market to smaller firms?

It is about the flexibility, and adapting to the smaller volume for customers that do not have big data centres. One example is our Rattlesnake Creek scheme in Nebraska, where we have two customers: one is Facebook, for two deals totalling 320MW; the other is Adobe, which has entered a deal for 10MW. It’s not only about pricing, it’s about risk management.

Which other wind projects are you focused on?

We have more than 800MW under construction; and our plan is to start commercial operations of these plants worth $1.2bn by the end of 2018. We’re also entering Nebraska; we have another project in Kansas; and in Illinois – a newer state for us – with new customers: General Motors and Bloomberg. And we have been awarded another 146MW of capacity in Alberta.

Other projects will come for 2019. We are working with our co-developers and making real progress with customers to buy energy from these projects; with the grid connections; and also to find financial partners for tax equity financing, and in cash equity and we have an escrow facility.

Are you facing any challenges with securing funding?

After the tax reform we had during 2018, we continue to see appetite from existing traditional participants, and also new entrants. We are closing deals for the projects in 2018 and we are confident that there is liquidity.

You discussed Alberta earlier. How important is Canada in your plans?

We have had a presence in Canada for almost ten years, and we are prepared to take more opportunities that are coming – particularly in Alberta, which is planning for 5GW installed capacity in the coming years.

Are you working with Enel X- Enel’s e-mobility and digital arm – on matching renewable generation with electric vehicles?

Yes. It is important for us because the business we are doing with Enel X is complementary to our renewables proposal; and Enel acquired in the US in the past year three companies that are focused on these new solutions for customers. One is Demand Energy, which is focused on the storage smart solutions behind the meter; and EnerNOC, which is the leader in demand response and is offering flexibility solutions to the customers. And there’s also eMotorWerks, which specialises in smart charging stations in the e-mobility technologies.

This is important to the transformation of Enel and, related to e-mobility, you know that we have a global target of the installation of about 300,000 charging infrastructure by 2020.

Given your O&M background, what are the biggest ways to make O&M more efficient?

There is a huge opportunity to create value by operating our assets efficiently. We will have more than 2,000 turbines here in the US, and all the information we are receiving in real time on each single turbine is giving us insights, continuously, about the performance and efficiency. We are talking about big data analytics.

We are already doing this and we have a goal that, by 2020, more than 85% of our activities for maintenance will be predictive. With predictive analytics, you can better manage costs and the efficiency of the turbines.

We started this eight years ago, in 2010, when I was responsible for global EGP O&M, and now we are using this on a daily basis to extract value.

This is also an area where you work with turbine makers. There is a limited number of large players in the US, so are you seeing enough competition between them?

Yes, we are seeing competition. The US is extremely competitive, and the average cost in the US for a single turbine per MW is lower than the global average. The manufacturers are working on new platforms and new turbines that are higher, with bigger rotors, higher efficiency, new technologies – and that is reducing costs by more than 10% year-on-year.

Now the manufacturers are working on products for 2020 and 2021 that could be extremely competitive, and help to cope with the phasedown of the production tax credit.

While the PTC will expire, we’re confident that the technology will continue to be competitive.