Gabriel Busca, from Vestas: “In the future there is room to continue growing in renewable energies”

Furthermore, with Ternium builds the Vientos de Olavarría PE, located in the province of Buenos Aires with 99MW of installed capacity. At the beginning of 2025, it plans to start the construction of a new park next to Tenariswhich will have 21 turbines.

In dialogue with Energy Report, Gabriel Searchdirector of Customer Project Execution at Vestas in LATAM South, took stock of the company’s activity, analyzed the pending challenges for the growth of renewable energies and estimated that with the RIGI and the lifting of the dollar stocks, new opportunities could be channeled investments.

Journalist: What is Vestas’ assessment of the year’s activity?

Gabriel Search: Since last year the sales team has worked very hard with a very aggressive strategy to position us as a leading supplier. In 2023 we finished the construction of six projects in Argentina and we have already started preparations for 2024. This year we have four projects under construction, two have already been completed. One of them is La Elbita with Genneia, the other from Pampa Energía, which was recently announced. We have plans to finish the other two by the end of the year, in December. The assembly is still missing and we probably have some commissioning activities left. 2024 has been a super productive year because we have positioned ourselves as a key player in our country.

Journalist: One of those who are going to finish is from YPF Luz, in General Levalle, provinces of Córdoba…

GB: Exact. This is an iconic project also in Latin America because it is the landing of EnVentus technology. They are 6.2 mega generators, 162 meters in rotor diameter, which is the largest platform installed in the region.

Journalist: What advantages does it have?

GB: It is more volume per unit area, because being a higher power turbine, in the same location allows you to have greater energy generation. It is a recommended product when the availability of space is a restriction or the number of positions that you can install in the field in which you install the project.

Journalist: And the other project that is finished before the end of the year?

GB: It is called Olavarría, it is about 30 kilometers from the town. Our client is Ternium, which was also announced. This is our second project with the Techint Group and we have one in the pipeline for next year. They are satisfied, so are we. It is always a satisfaction to finish projects well, on budget, within the established deadlines, so that our clients are happy too.

Journalist: How do you observe the recurring deficit in electrical energy, linked to distribution and transportation?

GB: There continues to be a deficit, and that is a problem for the country. It is one of the main challenges facing the wind sector, and the energy sector in particular. Argentina has a huge geographical distribution. The best areas for the production of wind energy are found in Patagonia and the south of the province of Buenos Aires, and practically 60% of the demand is concentrated in the metropolitan area of ​​Buenos Aires, south of the coast and the center. , which would be Córdoba. This physiognomy makes the transportation infrastructure a limitation to be able to deliver energy from the point of generation where the demand is.

Journalist: And who should face the missing infrastructure works, because the national State withdrew from public works?

GB: There is a lot of talk about the issue, about who should be in charge of financing the expansions of these infrastructure works. If it is the transporter, the users, if it is the generator. I believe that part of the State’s role here is to define a long-term strategy that allows us to have a clear regulatory framework, which allows the viability of these investments that are definitely necessary so that users have clean and affordable energy, as cheap as possible.

Journalist: Are you prevented from participating in projects due to this lack of works?

GB: There is room to develop, but the policies have to be clear because investments in infrastructure are expensive and take time to build. Therefore, those who are going to make the investment need to be clear about how the recovery of that investment will be, who is going to pay it and in what period they will recover it. That is part of the development of any project in our business.

Journalist: And what do your clients say about this situation?

GB: Our clients evaluate the availability points of the network, which are becoming fewer and fewer. They try to install themselves as close to the network as possible, because that lowers the cost of connection. And in a reliable node, in order to ensure that the energy will be available to be injected into the network at all times.

Journalist: What more is needed to increase the weight of renewable energies in the national energy matrix?

GB: Law 27,191 established a tiered scheme between renewables, with obligations for large users regarding what percentage of their demand they had to cover from renewable sources. Indeed, the goal for 2025 was 20%. Today we are at approximately 14%. With the projects that are under construction this year and next year, that number is going to grow a little more. Therefore, I believe that we are going to be around 15% or 16% next year. In the future there is room to continue growing, there is still demand for renewable energy. Large users are interested in taking renewable energy because they are seeing that, on the one hand, it is economically convenient and, on the other hand, it presents them with an advantage from the point of view of making their consumption matrix greener. This favors them to position their products in international markets or to access a cheaper financing mechanism, which requires that the use of these funds be used in sustainable projects.

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Journalist: What other challenge does the sector face?

GB: Another drawback is the medium and long-term political-economic framework. Our sector, being capital-intensive investments that are then recovered throughout the operation, of 20 or 25 years, needs clear policies regarding remuneration levels, access to foreign currency to be able to pay for the components, to be able to buy or pay for the spare parts that are necessary for the operation and maintenance of the turbines, tax aspects, so that the rules of the game are clear for those who make the investment in a wind project, know what the tax scheme to be paid is like or if there are any tax benefits, that those benefits are effectively capitalized. And generally that is usually a doubt. In Argentina, with the ups and downs of our economy, these rules are usually not completely clear and in some cases they tend to be an obstacle for decision makers to really decide to move forward with this type of projects.

Journalist: How much clarity does the RIGI provide to renewable energy projects? Can they multiply?

GB: I think so. The RIGI is a policy that clearly encourages large investments. Of course it helps or drives investment in our projects. Days ago there was a meeting on renewable energies where one of the panelists stated that our country, in some cases, has already taken some incentive measures at the tax level that for companies in the medium and long term were difficult to capitalize on, monetize. For example, benefits of early amortization or early recovery of VAT. They are very good policies, to promote investments, but if later that does not materialize in results, it ends up leaving a pall of doubt. The RIGI is great, the challenge is that the declared policies can be put into practice and whoever decides to carry out an investment can then monetize those benefits.

Journalist: As a manufacturer of key components for the electrical industry, Vestas is an important player, do you have any concerns regarding possible outages in the summer?

GB: We do not participate in that sector, we are in the generation sector, we design technology, manufacture our products and then carry out the construction and operation and maintenance of wind farms. But our clients are companies that are dedicated to the generation of electrical energy and make it available to users on the network. The issue of outages of course concerns us, but more as users than as suppliers, because ultimately we are also in that value chain and outages affect all users, both residential users and the industry in general.

Journalist: Why do you think cuts may occur?

GB: These cuts are a product of the lack of investment that Argentina has seen in the last 20 or 30 years in transportation infrastructure, which as demand grows is increasingly closer to the design limits. Argentina needs investment in infrastructure, making its network more powerful and more reliable

Journalist: At the same time, Argentina has a strong regional and global energy potential. What expectations does Vestas have in the country?

GB: Vestas At a global level it is a very large company. It has around 15,000 million euros of annual turnover. Latin America is an important player, an important contributor to that volume of business. Vestas Latin America is based in São Paulo and we, as the Latin America South subregion, serving Peru, Chile, Argentina and Uruguay, are strong and optimistic about the future business potential in the region. In Argentina we built six parks last year and four this year, and although in quantity they are less, in terms of installed power we are talking about the same magnitude or even greater. Last year we installed 100 turbines, this year we plan 114 by 2024 and that represents approximately a fifth of the turbines we install per year in the region. Therefore, Argentina is big and our bet is that it will continue to grow in the future.

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Journalist: How much does the dollar clampdown or financing issues complicate the business climate?

GB: In recent years, as these are energy investments that are necessary for the country, that allow diversifying the matrix and that contribute to reducing the cost of the megawatt hour put into the system, access to dollars has not been a limitation for our clients. . Or if they have, it has been short-term. These projects are projects that, from the moment the idea is born until they materialize in operation, can take 3 or 4 years. The projects we currently have in progress have been able to overcome obstacles, if any, and cash flow has not been affected. And from what I see, the economic policies of the current Government somewhat aim to reduce these restrictions. I believe that at some point there will come a time when the dollar will be able to be freed and companies will be able to access foreign currency on demand to be able to meet the obligations that a project of this type entails.

Journalist: Does the scenario change much without the dollar clamp? There is talk that it will be raised at the end of the year with a cap of US$100,000…

GB: If it’s $100,000 it doesn’t change it at all. Here we are talking about investments of hundreds of millions. Looking forward, I believe that the economic measures that this government is adopting will help close the gap between the official dollar and the parallel dollar, and help Argentina regain confidence. Added to clear rules, access to dollars to be able to meet the payments that these projects represent should not be an impossibility.