Q&A: Pablo Otin, 8minutenergy Renewables — Part I
California-based 8minutenergy Renewables has plans to dramatically expand its utility-scale solar business this year. The shop, which has 320 MW of operational projects in California, has been awarded more than 1.4 GW in power purchase agreements. 8minutenergy is now looking to expand its reach outside of California to the wider U.S., Latin America and India.
Pablo Otin was recently hired as v.p, of emerging markets to oversee the company’s expansion (PFR, 10/14). Otin, who is based in the San Francisco office, joined 8minutenergy from Gestamp Solar, where he oversaw the Spanish company’s operations in the U.S.
PFR’s managing editor, Olivia Feld, spoke to Otin about the company’s plans to expand, particularly into Brazil and Mexico.
PFR: Your title, v.p. of emerging markets, is quite wide-ranging in terms in what it means for your coverage area, so can I start by asking what is it that you are working on?
I’ll start with telling you about the company. 8minutenergy is the largest independent solar PV developer in the U.S., and we have around 1,400 MW of signed PPAs today with a number of announcements in the pipeline that will increase that number significantly. We’re one of the top five developers in the U.S., and we specialize in the utility-scale segment.
Until recently the company had offices just in the U.S. — in California — and now we’re expanding. We have an office in Dallas, and we’re tapping markets outside of California. Internationally, we have operations in India, and we’re active in Mexico and Brazil, as well as some of the neighboring countries close to India.
With regards to my personal history, I started at 8minutenergy in September last year. I was close to the principals of the firm before that, and we defined a strategy to move beyond the U.S., to international markets, particularly in Latin America.
PFR: Why are Mexico and Brazil the two primary countries of interest in Latin America and what kind of projects are you looking to develop in those countries?
Latin America presents significant opportunities all over. Take a look at Mexico, Argentina, Peru, and Chile. You will see that across Central America many countries have a lot of solar potential. All of them are phenomenal in many aspects, from the micro to macro levels, in terms of being attractive markets to developers like ourselves.
We are a company dedicated to making solar energy costs competitive to fossil fuels, and our approach is driven by volume and by consistency. We perceive that Mexico and Brazil present the best opportunities for utility-scale solar, and they align best with our long-term goals and our DNA. So while other opportunities in other markets are very interesting and exciting for us, Mexico and Brazil present the largest opportunity.
PFR: Will you continue to focus solely on solar development?
Yes, we currently only do solar and we only do solar in the utility-scale segment. We’re very specific, very narrow in our focus. As you likely know, the solar industry is simple and complex: simple in the technology, and complex in making it work. And we are very specific in the segment in which we play, and in which we will play over time.
PFR: Let’s move on to the impact of five-year extension of the investment tax credit and how that affects the pipeline of project development in a company like yours. We now know tax credits will continue to help to support the industry in the U.S. Does that have an effect on the company’s emphasis on emerging markets?
The extension of the ITC is great news for us and for the whole industry. We are very glad that it has been extended. But we made our decision to go international, and to expand our reach to new economies, well before the extension. We have always seen the merits of solar in growing beyond the U.S.
PFR: Can you tell me a little about Mexico specifically, what’s happening there and why that market is attracting a lot of interest from both sponsors and financiers right now?
I just came back from Mexico and there is a lot of activity going on, and there is a lot of solar interest across the board, as you described. The good news about Mexico is that it is a well-known and stable economy in every aspect. It has an ecosystem of solar developers and financiers. So we are starting from a significantly higher level of solar sophistication than in some other countries, and best of all, there is going to be consistent solicitation as the government will be procuring for many megawatts.
Another interesting twist with Mexico is that the government is very agnostic in what they call “clean energy”, and they will be buying what’s best and low cost. This represents the biggest driver for solar for us, because we are competitive with so many other forms of energy. We feel it is a tremendous opportunity for us, and we certainly want to be part of the solar industry in the country.
PFR: Could you tell me about the government’s open solicitation, where are we up to in that process right now?
Two weeks from now they will close the precertification process. After that, in mid-March, people will submit their pricing. At the end of March, the government will announce who they be awarding contracts to. So it’s very imminent.
Everyone is working very hard to qualify their projects across many sectors, not just solar, but also wind and other technologies. There is a lot of anxiety and anticipation to finalize this process, and to see how the very first auction works out. The good news is that the government is planning subsequent auctions, and this is just the first of many.
PFR: What is your take on the market in Brazil right now and why that is one of your other target areas for this year?
Brazil started to do solar auctions under the “leilão” program. The first announcements for auctions started in August 2014, and then another two auctions came out last year, so now there are over 3 GW already in order in Brazil. If we put that in the context of the global solar industry, that makes Brazil one of the top 10 new markets right now. Only places like Japan, China, the U.S., India and now the U.K. are ahead of them in terms of growth.
Brazil is ambitious and is planning to do one or two more auctions over the next five years. The auctions are for utility-scale and they are very competitive. As I described before, that’s what we like at 8minutenergy: we like consistency, we like competitiveness, and we like utility-scale projects. Brazil presents a phenomenal opportunity all around for us and for the solar economy.
PFR: How many megawatts are you targeting for those two markets?
I’m not at liberty to disclose our internal goals, but on average, we like to have 10% share of any market in which we act. As an example, in California our utility-scale market share is nearly 15%. We would like to reach that level in these new markets, but we’ll have to see where we get.
Check back next week for the second part of this Q&A.