In a recent interview with PV Tech’s Molly Lempriere on the Italian solar PV market, Richard Braakenburg, SUSI Partners’ Head Equity Investments, discussed the firm’s investment in an Italian solar PV development platform announced earlier this year (more here).
In the following, Braakenburg’s quotes from the interview are presented with minimal context added. The article is available to PV Tech subscribers in this month’s issue of PV Tech Power.
Asked what drove the decision to launch the development platform, Braakenburg explains: “When prioritising our investment activities, we focus on market fundamentals. Essentially, we look at where our levelized cost of electricity is most attractive in comparison to views on long-term power price dynamics, in the case of solar PV also with a view on irradiation levels. And that is what drove our decision to focus on Italy.”
Braakenburg then elaborates on high development premiums for ready-to-build assets in Italy: “While the market fundamentals are strong, there has just been a dearth of quality projects, so ultimately it’s just pure supply and demand dynamics. So we think there is significant growth potential in the market.”
Asked how the market for power purchase agreements (PPA) has changed over the last year given the volatility of power prices in Europe, he says: “It is interesting because you end up in a bit of a conundrum actually. Do you want to sign a PPA now, a long-term PPA at prices that the corporates will not necessarily want to pay? And equally, a lot of [power] producers would be well served by just being merchant at the moment. So I think the whole debate is probably in a little bit of a hiatus, simply whilst we wait for these volatile times to shake out. But I think that markets will still be there.”
Braakenburg then sketches out the future plans for the Italian development platform in terms of expansion or adoption: “The big challenge that I put to our local management team is to say, how much more can we do? So we are focussed on solar at the moment, but having a development platform with an experienced local management team – they see things, they hear things – we ask them ‘What about other areas? What about storage?’ So I would not be surprised if over time, we end up going from solar to adding storage, either as co-located or indeed as a separate development activity focussed purely on front-of-the-meter storage. So that’s how I see that particular platform growing in the Italian market.”