The Texan fund will finance its investment with its own funds and recourse to the market. Its parent company in Spain, NetOn Power, will have 300 megawatts of installed capacity.
They say that the key to a good business is as much in the idea as in the ‘timing’. If we take the official figures into account – and without inflation – the Spanish economic recovery seems the perfect opportunity for an investment group such as the Texan fund Quantum Energy Partner to make its landing in the Spanish industrial self-consumption market. Especially at a time when investment is still being viewed with a sidelong glance due to the various uncertainties arising in the international economy.
Through the recently created Spanish company NetOn Power, headed by a former Endesa executive (ex-CEO of Endesa France and former general manager of Endesa International), McKinsey and KPMG, Alberto Martín Rivals, the Texan fund will invest around 180 million euros (200 million dollars) over the next five years in Spain to acquire an installed 300 megawatt plant.
The investment will be financed with equity (45 million euros), bank debt (90 million) and reinvestment of profits (45 million), according to estimates by the management of the Spanish company which, according to its board of directors, “focuses its activity on offering self-consumption solutions to industrial companies through a comprehensive management model, which includes the financing, installation and operation of renewable installations”.
NetOn Power will compete in the industrial self-consumption market. According to its business model, the customer will not have to make any investment, but NetOn Power itself will be responsible not only for the technical and feasibility study, but also for making the investment and offering industry “substantial savings on its electricity bill and a stable electricity price guaranteed in the long term”, says Martín Rivals.
Its target are companies that, on average, have an energy bill of around half a million euros per year. NetOn Power, which has more than 20 projects in different stages of development, is beginning its assault on large consumers from its offices in Madrid, Bilbao and Barcelona.
To this end, it will be supported by a management team made up of professionals from the sector with extensive experience in renewables. This is the case of Javier Serrano, former General Manager of Renewables at Naturgy; Roberto Alonso, from KPMG and Endesa; Guillermo Pérez Almendral, from the law firm Simmons&Simmons and Enérgya-Villar Mir; and Axel Narváez, from Torresol.
NetOn Power’s offering focuses on self-consumption projects that generate electricity from renewable sources connected directly to customers. “This allows them to reduce their purchases from suppliers and thus generate significant savings on their bills while improving the stability and availability of their supply,” he adds.
The projects promoted by NetOn also help its industrial customers to meet their emission reduction targets.
A green giant with 16 billion in its portfolio
Founded in 1998 in Houston (Texas, USA), Quantum Energy Partners manages an investment portfolio of 16 billion euros ($18 billion) in more than 30 investees employing more than 5,000 people worldwide.
Its green energy division is headed by the company 547 Energy (a name derived from the pantone number of the so-called ‘electric green’) and led by the also Spanish Gabriel Alonso (former CEO of EDP Renovables in North America), already had a presence in Spain in the floating offshore wind business through the BlueFloat platform.
Industrial self-consumption is a fast-growing sector in Spain. According to the Spanish Photovoltaic Union (UNEF, the sector’s main association with more than 640 member companies), installed capacity has doubled on average every year for the last seven years. The installed self-consumption capacity in Spain at the end of 2021 barely exceeded 2,700 megawatts compared to more than 17,000 megawatts in Italy or 40,000 megawatts in Germany.
To reverse this situation, Spain has approved a series of regulatory changes that promote the development of self-consumption, such as Royal Decree 244/2019, which regulates the administrative, technical and economic conditions for self-consumption, and Royal Decree 477/2021, which establishes a subsidy budget on account of European NextGen EU funds of 1.12 billion euros (660 million initially) for self-consumption and storage facilities.