GIG: Iberdrola is a world leader in renewable energy with 32.7 GW of installed capacity, having entered the Hellenic market in 2005 through its participation in Rokas Renewables. What instigated Iberdrola’s entry into the Greek market and how has this presence evolved over the past 15 years? What are the benefits stemming from Iberdrola’s market entry by way of Rokas Renewables?
Tsantilas: In 2001, following the inspiration of what was then a new management team, Iberdrola adopted a strategic plan anticipating the world’s need for more clean energy. In fact, it was this vision that drove the company to assess renewable energy sources as an alternative means through which to generate energy in a sustainable and innovative manner, coupled with its goal of financial growth through global expansion.
Meanwhile, C. Rokas S.A. (Rokas Renewables) was, at the time, the only company with a business focus on RES, having actually pioneered the sector’s development in Greece since the 1990s. Sustainable growth had always been at the core of Rokas Renewables’ corporate values and drive, which happened to entirely match the mentality and aspirations of Iberdrola.
In 2005, Iberdrola found in Rokas Renewables an ideal business partner with whom to join forces, and pursue a shared ground-breaking vision. Therefore, after vesting its trust in the company and becoming fully convinced of the Greek team’s capacity, local know-how, proficiency, and familiarity with domestic market conditions, Iberdrola completed the acquisition of Rokas Renewables in 2007.
As one of Europe’s leading electricity utilities, Iberdrola’s entry into the Greek market sent a message of confidence to investors across the globe, underlining that there is space in our small country for the operation of sustainable businesses. In doing so, Iberdrola diffused particularly high value in the local economic and business environment.
Since then, a lot has happened in the world and more specifically in Greece: From the economic crisis that erupted 2012, which resulted in a rise in Greece’s country risk and the reconsideration of most corporates’ investments plans in the country, to Greece’s eventual recovery from the recession in 2017. But what’s remarkable is that despite all those challenging years Iberdrola maintained its reliance on and commitment to Rokas Renewables. In this manner, Iberdrola upheld its commitment to the local economy and RES development opportunities in Greece, affirming it is here to stay.
GIG: What role has Rokas Renewables played in the development of Greece’s renewable energy sector? What is your position today in terms of market share?
Tsantilas: For starters, as trailblazers in Greece’s RES-based energy generation since the 1990s, Rokas Renewables’ resourceful and visionary management team were the first to discern the country’s exceptional wind energy opportunities, resulting in the company’s investment in the sector’s prospects.
It’s worth mentioning that Greek Law 2244/1994, which was the country’s first regulatory framework for energy generation derived from renewables, was particularly innovative at the time, even with respect to the European investment environment. And it was precisely this legal framework that enabled the company to build the first privately owned wind farm in Greece. As a result, Rokas Renewables actually paved the way for the development of Greece’s RES market, while also triggering the European business environment to seek opportunities within our domestic market. Since then, and over the course of the past 25 years, Rokas Renewables has spearheaded the construction and development of many privately-owned wind farms throughout both Greece and Cyprus.
Rokas Renewables used to be a vertically integrated company, meaning all business aspects were run and developed in-house. From design and development across to construction, operations and the maintenance of projects, everything was done internally. We even had a privately-owned factory operating in the Peloponnese, that successfully manufactured steel structures for almost three decades, and even enhanced its production capacity and installations to build wind turbine towers.
The scope and depth of the company’s activities during its history serve to underline the magnitude of the added value that Rokas Renewables has brought into the sector, and the important impact it has created for both the Greek and the European RES Market. Consequently, during the first decade of the second millennium our company dominated the relevant market. However, as soon as the RES market became multifaceted, embracing more technologies (mainly photovoltaics), favourable conditions were shaped in the Greek economy creating room for other market participants to also emerge in leading positions.
Today, Rokas Renewables maintains the third position in the Greek wind energy market in terms of installed capacity, with a solid incentive to accelerate its growth even further.
GIG: Can you provide us with a breakdown of your current project pipeline?
Tsantilas: Rokas Renewables currently, operates 20 wind farms and 4 photovoltaic (PV) parks with a total installed capacity of 301.5 MW, spread across Greece (in the regions of Central Greece, Crete, Thrace, Thessaly, the Peloponnese and Dodecanese) and Cyprus. Additionally, 134 MW worth of auction-awarded projects are currently under construction and will be completed within the next two years.
Moreover, we hold a resilient and dynamic pipeline of new developments with a balanced mix of mature and mainstream wind and PV projects totalling 600 MW. While our target is to develop and evolve more sustainable projects for future investment, we simultaneously work on special projects.
GIG: The Spanish electricity producer earmarked EUR 12 billion for investments this year in green energy, smart grids, and large energy storage facilities. What does this mean in terms of investment prospects in Greece’s energy transition? What is the most important project you are currently working on in terms of economic impact and why?
Tsantilas: Actually, Iberdrola recently officially announced gross investments of €75 billion for the 2020-2025 period, of which €68 billion are set to be organic with 51% of this last figure set to be invested in renewables. With this, Iberdrola’s installed RES capacity will increase by 28 GW, totalling almost 60 GW.
In terms of Greece, Rokas Renewables’ approved growth plan foresees the development of an additional 500 MW of installed capacity by 2025, due to which our team is working tirelessly to support the implementation of this blueprint.
It should be noted, however, that this investment plan doesn’t include the Aegean Link project. This entails the interconnection of three Northeast Aegean islands (Lesvos, Chios, and Lemnos) to the Greek mainland, together with the simultaneous development of wind farms with a total capacity of 706 MW. More specifically, current plans foresee the development of 306 MW on Lesvos, 150 MW on Chios, and 250 MW on Lemnos. We are currently optimising the project’s maturity level, which should be processed within the coming two years.
It’s important to highlight that this project has been extensively presented to local communities, local government bodies, cultural associations, and local organisations. As such, it has obtained the positive opinion from the relevant regional council.
The grid interconnection of Greece’s islands is very important for the country, bearing in mind we house 227 inhabited islands. More specifically, by completing the islands’ interconnection with the mainland, Greece will achieve an enormous decrease in operational costs derived from the phase-out of diesel-based power generation plants. This will be coupled by enhanced levels of power availability, transmission system reliability, and security of energy supply.
Again, it was Rokas Renewables that in 2008 presented the first proposal to construct the interconnection of three Northeast Aegean islands with the mainland, which at the time was deemed very novel and advanced.
In light of these projects and ambitious plans, it’s implicit that the size of our planned investment will immensely impact the Greek economy by promoting direct and indirect employment in local communities, people’s well-being, the protection of the environment, affordable clean energy generation for all, and the upgrade of useful and beneficial public infrastructure.
GIG: What is your assessment of Greece’s RES landscape today? What are the biggest challenges and opportunities derived from Greece’s transition to a fully competitive and liberalised energy market?
Tsantilas: It is with great interest that we are observing the transition of the global and European electricity system from conventional electricity generation to one relying increasingly on RES. Undoubtedly, the design of a solid RES investment programme is not only a necessity for Greece but also a one-way solution for economic growth. This, similarly, applies to other countries around the globe.
Since competitiveness has dramatically increased in the RES market, in order to succeed in producing and maintaining a sustainable RES framework what we need, primarily, is stability. This entails the firmness and solidity of the regulatory framework along with the availability of readily tested and effective tools. In this respect, auction schemes and the EU target model will resourcefully attract more serious investors to the country.
In an auxiliary manner, the electricity prices that will derive from the implementation of the target model, as a result of the alignment of the Greek and wider European market, will signal the maturity of the domestic electricity market. Similarly, this transition will highlight the comparative advantage of Greece’s RES market, from an investment point of view, which demonstrates excellent wind and solar prospects. And it’s this potential, in fact, that safeguards the viability of RES investments while also contributing to stabilise the return rates on such projects.
Nevertheless, the most important opportunities deriving from Greece’s energy transition to a fully competitive energy market will, without any doubt, be derived from the grid interconnection of the islands and the development of the country’s offshore wind sector. Greece’s extensive wind and solar potential will most certainly be converted into a valuable asset for electricity generation, serving to showcase the local market based on a new profile of power generation. Additionally, the potential of both energy storage and hydrogen technologies are undeniable.
As far as the challenges are concerned, I reiterate that what is predominantly indisputable is the need for the stability of the RES market framework. We have experienced both past and more contemporary instances of unexpected adverse modifications to a pre-agreed long-term framework that evidently cause disruptions to the sustainable development of the sector.
GIG: What are the benefits stemming from having the backing of a major international energy group, particularly as Greece prepares to rollout a legal framework for energy storage and the development of offshore wind? What role can we expect Rokas Renewables to play in this respect?
Tsantilas: Within the context of Iberdrola’s historic investment programme through 2025, the group is anticipating capitalising upon the wealth of opportunities that are being created by the energy revolution facing the world’s major economies. 90% of this investment volume will be aimed at consolidating its business model, based on more renewable energy, more networks, more storage, and more intelligent solutions for its customers in those countries with retail business.
Additionally, Iberdrola already boasts noteworthy know-how in the construction and operation of offshore wind projects, through its presence in both the UK and Germany. These are the countries with the highest installed offshore wind capacity in Europe, accounting for 45% and 34% of all installations, respectively.
To put things into context, Iberdrola currently has close to 1.3 GW of installed offshore wind capacity (that increased by 70% in 2020 versus 2019), and another 1 GW under construction.
The fact that Rokas Renewables’ team counts on the proven backing of its robust parent company creates excitement for what is to come, with our team being committed to work at its utmost capacity, especially in those fields that are at a preliminary stage in Greece, like energy storage and offshore wind. Rokas Renewables stands ready to work in an active manner, and establish a fruitful cooperation with relevant stakeholders to enable the deployment and rollout of the best possible regulatory framework, thereby honouring the commitment that Iberdrola continuously demonstrates to our team and the Greek economy.
To put it simply, Iberdrola is “the conductor,” whereas our local team are “the proud musicians” that follow the tempo. And together, our performances have always been superb!
GIG: What importance do you attribute to sustainability within the scope of Rokas Renewables’ activities and investments across Greece? How are you working with local communities to ensure your presence creates a positive impact and a win-win scenario?
Tsantilas: Iberdrola’s underlying purpose is to uphold its leading role as a global and sustainable company in the 21st century. Because of this, its values are intrinsically linked to the development of sustainable energy, while being a driving and integrating force.
Rokas Renewables and Iberdrola have been forerunners in the advancement of renewable energy. We have always sought to be an inspirational model by creating economic, social, and environmental value wherever we go, building and operating projects looking to the future. As professionals, we are dedicated to act and work in a safe and responsible manner, while upholding values like ethics and respect to people, local communities and the environment.
Ensuring the sustainability of our business is as equally important to us as safeguarding the environment and the prosperity of the people, wherever our projects are installed. Our interest has always been to build and maintain dutiful relationships and active links with local communities (mainly through public consultation), valuable infrastructure works, the full employment of residents, corporate alliances with local businesses, and contributions to local everyday life, with any kind of resources, in compliance with Iberdrola’s code of ethics.
Likewise, Iberdrola has already conveyed to Rokas Renewables the dynamic need to participate in the global transformation that was initiated in 2015 by the United Nations through the approval of its 2030 17-goal plan in a view to tackle environmental, social, and economic challenges that are threatening the future of our planet.
With Iberdrola and Rokas Renewables having chosen to be part of the solution through their activities, the companies have committed to the attainment of the Sustainable Development Goals (SDGs), while also having incorporated the SDGs into our business strategy and corporate governance system.
Therefore, although the main focus of our Group is to contribute to Objectives 7 and 13, “Affordable and clean energy” and “Climate Action,” accordingly, we directly contribute to the achievement of those goals relating to clean water and sanitation, industry, innovation and infrastructure, life in terrestrial ecosystems, and partnerships for the achievement of the SDGs. We also contribute indirectly to the rest of the SDGs by way of our contribution to the economic and sustainable development of the countries where we operate.
GIG: What advice would you give international investors who are considering investing in Greece’s renewable energy sector?
Tsantilas: International business practices have been in a state of flux over the last few years, while the pandemic has served to accentuate the indispensable nature of resilience. People and organizations are now, more than ever, understanding that in order to achieve sustainability we need to cooperate through synergies, sharing information and knowledge, while growing together.
Investors that are interested in creating long term sustainable business – working with social responsibility, including the United Nations SDGs in their business model and life towards a better future – and are convinced of the necessity of using RES in their energy mix are most welcome in Greece.
All of these attributes have multiplying benefits for both RES market stakeholders and societies. There is an abundance of opportunities – more than enough for all – as long as we work together to identify and maintain them!
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