UPC Renewables Limited is a pioneer in developing a robust and focused business through the utilisation of best-in-class equipment and quality project delivery.
DREAM, DEVELOP, DELIVER
The world’s appetite for wind and solar energy has grown dramatically since UPC Renewables came to fruition, and in that time the Company has built upwards of 50 renewable projects at a cost of more than €3 billion around the world to suit the needs of its increasing customer base.
Over the years UPC has remained true to its DNA, believing in good quality renewable projects, built accordingly to its tried and tested methodologies and using top-class management and equipment to produce clean energy.
As a developer, constructor and operator of renewable energy projects, the Company has been building both wind and solar farms around the world since the mid-90s. Although it does business in a wide variety of countries and regions, the common thread is the Founder, Brian Caffyn, who has a controlling stake in each area of operation.
Initially UPC operated in Italy, under the name, Italian Vento Power Corporation (IVPC) and built up 75 percent of the wind energy capacity in the country until 2005. During those early years, the original partners of the Company set up UPC Wind Partners in the US, working on projects in Maine, New York and Hawaii. Then came China, the Philippines and North Africa.
“Our business became a very well-known wind and solar developer and in late 2012 UPC set up its most recent platform – UPC Renewables Limited, based in Hong Kong,” explains Andrew Sutherland, Executive Director. “Now that entity has grown to encompass both wind and solar power in the Asia-Pacific region, including Indonesia, Vietnam, South Korea, India, Taiwan and Australia.”
INVESTMENT OPPORTUNITY
One thing that remains a constant at UPC is Brian Caffyn’s influence. Wherever a new UPC business is set up around the world, he remains central to driving it forward.
Sutherland continues: “When we start any new platform business, we will bring in likeminded development stage investors, usually individuals with an appetite for risk that suits the business we are in. Once projects are ready to construct, we will bring in different corporate investors with a different risk/reward appetite to provide construction funds.
For many project developers in the industry, they think of their product as the project itself and therefore as assets to be sold on when they can maximise their profits on those projects; normally exiting the project entirely sometimes prior to the project even getting built. UPC is different, staying in the project company once it’s in operation and retaining operational control.
“We like to think of our product offering as energy and specifically electricity, which we will go on to sell to utilities and corporate buyers.
“We also follow the trends in the industry closely,” adds Sutherland. “For example, we were building projects with 500KW wind turbines in the early years, but now technological advances mean we are looking at turbines of 3,500KW and even 5,000KW rated outputs.
“Although these projects are more expensive to purchase and perhaps more difficult to transport and erect, they have approximately 20 times the output available, despite being only 10 times larger.”
PROJECT MILESTONE
At present UPC Renewables Limited is continuing to develop projects in Southeast Asia, Korea, Taiwan, India and Australia, the most recent of which is the Sidrap 75MW wind farm in South Sulawesi, Indonesia which reached commercial operation at the very end of March.
“This project was the first utility-scale wind farm in the fourth most populous nation in the world,” affirms Sutherland. “We worked with national utility company, PT PLN (Persero) and helped to educate them – as well as a multitude of government agencies – in the nuances of wind energy, and after lengthy discussions and negotiations a power contract was signed.
“This was a huge milestone for us and congratulations and thanks go to PLN for their full engagement and thoroughness throughout the process.”
As it was the first project of its kind in the country, only international commercial and development banks were considered as an option to finance the development. This ultimately concluded in a loan agreement with OPIC (the Overseas Private Investment Corporation of the US) for 80 percent of the project cost. Ayala Corporation of the Philippines partnered with UPC in providing the other 20 percent of the funds necessary to fully fund the construction.
“We are hoping to begin work on the expansion of the Sidrap Project this year, while also pushing forward with four other wind projects in Indonesia plus another half dozen wind projects in Australia and Vietnam,” explains Sutherland. “Aside from wind, we have more than a dozen solar projects in operation throughout Asia, including Korea, Taiwan, India and Vietnam, all of which are moving forward well.”
Like many of the companies in the renewable energy space, UPC is also looking at moving forward with the development of energy storage. These projects will include battery storage, advanced control systems and other technologies that can alleviate the concern of intermittency that grid operators have to assist in managing wind and solar’s intermittency.
Sutherland goes onto describe: “Storage is becoming the key to obtaining additional contracts for projects and is driving the industry forward. To bring more renewable projects into operation, it is imperative that utilities gain acceptance of the renewable product (wind and solar plus storage) while also acknowledging that the cost of that project is attractive. With no fuel, there can be no fuel cost shocks to the utility either, so we consider the renewable product to be less risky too.”
FOREFRONT OF TECHNOLOGY
Over the years UPC Renewables has worked tirelessly to remain at the forefront of technological advancements within the industry, as well as spending copious amounts of time looking at trends such as wind turbine and solar panel technology.
“Working in such a competitive landscape for renewable projects, we often have to specify products when we tender projects that may not yet be available,” adds Sutherland. “However, we have a very good insight into the manufacturers and keep up with their product commercialisation timetables so we can be sure that these products will be available when we are required to start building.
“This is a fine line and one that we have to walk carefully in order to monitor any changes in regulations or technical issues that might mean the trend patterns change and that could potentially upset this way of thinking.”
Alongside monitoring industry changes, in the operational phase of the projects, the Company carries out a vast amount of predictive analysis, ensuring that it will see any failures in wind turbine operations that are about to happen – rather than reacting to failures. Proactive management, not reactive management. This provides the Company with time to undergo a programmatic switch out of potentially failing parts before the failure happens, putting a halt on any potential disruptions to productivity and upsetting its utility customers.
“We are also incredibly conscious of our environment and put together a lot of effort to ensure that the environments we operate in are minimally impacted by our activities,” explains Sutherland.
“In the same vein, we continue to nurture our relationships with the local government and communities through social engagement and a commitment to well-funded corporate social responsibility (CSR) budgets.”
The Company has remained relatively small and nimble in its operations, confining itself to markets that make good sense from a development point of view. Further to that, the Company manages its own construction processes through a multi-contracting strategy while also staying in the game post construction.
“I hope the time is near when UPC and all companies in our industry would have managed to move all the utilities to renewable energy projects as a default, making them far more desirable, technically and financially, than coal or other fossil fired fuels,” concludes Sutherland. “It is only by doing this that we will be able to turn the tide on the relentless CO2 emissions that the world is experiencing at present, turning us away from the potential of a bleak future.”
