British company Esparity Solar ‘attacks’ renewables in Spain from Valencia: 420 million in 9 plants

A “boom” in renewable energy projects

This situation was reversed a few years ago and has led to a boom in projects and international companies that are landing in the country with significant investments. This has been the case for British company Esparity Solar. Esparity Solar is dedicated to the promotion and development of photovoltaic parks and sees the country as the best market in the world for the development of photovoltaic energy. For this reason, it is promoting nine parks in different locations, totalling 550MW and with an investment of around 420 million euros.

Origins of Esparity Solar

The company, founded in 2017 by a group of 19 investors and experts in the energy sector, started its activity a year later and chose Valencia as its base of operations in the country. Its founder and CEO, James Sibony, had just set up another similar company in Australia, with which he promoted projects for nearly 1,000 MW. This was the seed of Esparity Solar Through the experience and knowledge of the sector he decided to set up a new company setting its sights on renewables in Spain.

“This country is the best market in the world for photovoltaic development. We have all the ingredients for its success: lots of sun, the land is very suitable and there are many areas with little agricultural value. Moreover, it is a country with a lot of growth potential and opportunities to export energy to the rest of Europe”, highlights the CEO of the company.

Nine projects in the pipeline

The energy company currently has nine photovoltaic farm projects in its portfolio in Spain with a total capacity of 555 MW and an investment of 420 million euros. Of these, five are located in the Valencia region, totalling 200 MW and representing 150 million euros of invested capital. The company currently has a pipeline of 2.6 GW.
Specifically, it is promoting a 150 MW plant in Pamplona; another 100 MW plant in Fontanar (Guadalajara); another six 50 MW plants in Biar (Alicante), Petrel (Alicante), Dos Hermanas (Seville), Novelda (Alicante), Monovar (Alicante); and a smaller 5 MW plant in Xàtiva (Valencia). Three of these wind farms, the one in Navarra and the ones in Movovar and Novelda, were sold to the investment firm Kobus Partners, through its third venture capital fund, Kobus Renewable Energy III.

“After the sector’s standstill for almost ten years, in Spain the cost of panels has fallen so much, while efficiency has risen, that producing a kW/hour of photovoltaic energy during the lifetime of the plant is cheaper compared to other technologies such as gas, coal, nuclear or wind. Therefore, there is a great competitive advantage and we are once again in a photovoltaic boom,” he stresses.

And its arrival in Valencia was no coincidence either. In addition to the fact that its general manager, Francisco Clavel, is Valencian, Sibony assures that historically the province has had a very important and prominent presence in the entire value chain of renewables. Not only that, but its connections and the reduction in operating costs compared to other places such as Madrid or Barcelona are also valued.

Focus is on Spain but looking at other businesses

The company is currently focused on the promotion and development phase of the projects, after identifying the land and connection points. It is also in charge of all the urban planning procedures for the parks. For the moment, their focus is solely on the Spanish market, although they also considered the possibility of making the leap to Portugal, an option that they finally ruled out due to lack of resources and capital.

However, they do not rule out diversifying their business lines and are already working on storage projects, as well as evaluating the possibility of moving into a phase of managing the construction of the plants and their subsequent maintenance. They are also considering keeping the photovoltaic parks for the long-term sale of the energy and thus financing the construction.

“We are not considering the commercialisation of the energy, which is a different business from ours, but we are considering alliances with a commercialisation company to sell the energy in the hourly market or through the fixing of a price with an industrial buyer. In fact, we are negotiating with a leading company which is one of the largest steel companies in the world, to try to decarbonise its business. We are still in a phase of negotiating the framework agreement for the sale of a good amount of MW/hour,” he explains.

There is currently a lot of uncertainty in the sector due to the approaching milestone of 25 January, when the projects must have received a favourable Environmental Impact Statement (EIS) from the Ministry of Ecological Transition in order to go ahead. If they do not reach this date with a favourable EIS, despite the fact that the projects have administrative authorisation, they will automatically be left out, losing the grid connection points and the guarantee deposited.

According to the regional employers’ association Avaesen, the viability of 160 Valencian companies is at stake, and they could end up bankrupt. In addition, the administration would also face possible claims of millions of dollars for patrimonial responsibility on the part of the promoters.

“Right now the whole sector is very focused on obtaining favourable declarations. It’s a very big responsibility,” he says.

"The procedure in the region is more complex than in other Autonomous Regions"

In fact, he believes that the Executive body is not going to be able to meet the deadline due to the large volume of projects it still has to assess. “The promoters have done everything we had to do to present the dossiers, but the Administration has been delayed. Therefore, in order not to harm the sector, we understand that the possibility of granting permits and licences with retroactive validity will be opened, that is, instead of granting the EIS in January, it will be in February or March, but with validity. Otherwise, they would be obliged to execute the guarantee and that would open up a very complex judicial process that favours no one”, he assures.
Given that the company is present in different regions, he has detected clear regional differences in the processing of projects. In this sense, he explains that in the Valencia region the process “is slower” than in other autonomous regions. “They have taken a long time and have not met the deadlines, and this has an impact on investor confidence,” he remarked.
So much so that, although five of the nine installations he is promoting are located in Valencia, the CEO of Esparity Solar admits that for the future his priority is “other communities precisely because of the processing” in the region. “The sector knows very well that the Valencia region is not easy for the development of renewables. It is true that here there are greater limitations in terms of land due to the landscape protection that exists in comparison with other areas such as Andalusia or Castile-La Mancha, which have smaller populations. But the reality is that here it is more complex to promote than in other autonomous regions,” he acknowledges.
They have also suffered the rejection of their projects by some municipalities. For this reason, they usually carry out participation plans with neighbourhood meetings to explain to them how the installation will be developed. “We work a lot with local communities. For example, in Monovar we sponsor the handball team to reinvest in the town so that everyone can benefit,” he points out.
In addition, three of its projects have been awarded the Seal of Excellence for Sustainability by the Spanish Photovoltaic Union (UNEF), which recognises ground-mounted solar power plants built with the highest criteria for social and environmental integration. This certification assesses socio-economic parameters, the preservation and restoration of biodiversity and the circular economy, in line with its commitment to economic, social and environmental sustainability.
“We always include in the projects compensatory measures to favour biodiversity in the perimeter of the installation, as well as measures that economically favour the municipality where the park is located through the creation of jobs or through sponsorships”, Sibony points out.

Plans for expansion

In the medium term, Esparity Solar has set itself a five-year plan to reach 2 GW in production by the end of 2028, with an investment of close to 1 billion euros in capital to finance these new farms. For now, several projects have already been signed or are in the process of being agreed and, in turn, they are going to opt for the new government auctions to obtain the connection points.
“We are preparing for these tenders with the aim of reaching 2 GW in production by the end of 2028. There will be around 17 new projects. Therefore, our strategy is to develop photovoltaic energy, but also to promote storage”, he concludes.

By: Begoña Torres