CLIMATE FOR CHANGE
After years of success in creating pioneering green energy projects across Europe, renewables giant ERG is now committed to helping the Scottish Government achieve its ambitious goals on carbon emissions, says Anthony Harrington
European renewable energy company, ERG is currently helping the Scottish and other European governments transition to green power.
ERG is uniquely well placed to do this, having achieved the huge task of moving itself from one of Italy’s leading oil and refining company to one focused wholly on green power.
The company was founded 80 years ago when ERG’s founder, Edoardo Garrone, was granted a license by the Mayor of Genoa, to trade in oil and gas products.
ERG began producing fuels at its San Quirico Refinery in Genoa and was soon building a major reputation as an oil and petroleum products company.
The first step in ERG’s ground-breaking transition to a green power company took place in 2006, when the company acquired EnerTAD, a listed company with around 200 MW of wind energy distributed among its projects and operational wind farms.
The ERG board then took the decision amass a world-class renewables generation portfolio through a combination of acquisitions and construction.
The initial focus was in acquiring onshore wind farms both in Italy and elsewhere in Europe.
The Montbéilard windfarm in the Bourgnogne- Franche Comté region of France
ERG’s wind energy business really moved to the next level in December 2013, when it announced the acquisition of IP Maestrale from Gaz de France. This brought ERG over 630 MW of additional installed wind power. Some 550 MW of this capacity was in Italy, with the remaining 86 MW being in Germany.
The acquisition was described by Bloomberg as the biggest M&A deal of 2013 in the global green energy sector. It meant that ERG doubled its overall wind power capacity to 1232 MW of installed power and became Italy’s leading wind power provider.
This was also the year when ERG sold its final stake in its refining business ISAB. At the same time it added to its portfolio in Eastern Europe with the acquisition first of some wind farms in Romania and Bulgaria and, years later, in Poland.
The UK in general, and Scotland in particular, is also an important focus in the company’s expansion of its international green power portfolio. ERG has said that it is particularly enthusiastic about the Scottish Government’s commitment to a zero net emissions target for the country by 2045.
ERG’s Scottish projects include Creag Riabhach in Sutherland, where the company has consent to increase the wind farm’s output to 92 MW from 79 MW. It is also expanding the 48 MW Sandy Knowe wind farm in Dumfries and Galloway to 90MW.
In Northern Ireland, the company is currently busy constructing two projects, the 25 MW wind farm, Craiggore and the Evishagaran 48 MW wind farm, both of which are in County Londonderry.
Reblading operations on an ERG Italian windfarm
At the same time as it has been expanding its onshore wind portfolio, ERG has also taken care to balance its renewables portfolio with the acquisition of hydroelectric and solar power generation capabilities.
It bought the 527 MV Terni Hydroelectric Complex in Italy from E.On at the end of 2015, and in 2017 it entered the photovoltaic solar panel sector with the acquisition of the Italian-based ForVei.
As it has developed, the company has paid close attention to its environmental, social and governance (ESG) responsibilities.
It now has in excess of 90% of its capital invested in renewable energy plants and has an installed capacity in excess of 3 GW. ERG’s commitment to its staff saw it providing more than 48,000 training hours to some 98% of employees, with 84% of that training being on technical and managerial topics.
The company recognises that in today’s world, with the fight against climate change being front and centre for governments everywhere, ESG considerations have to be at the heart of everything a modern company does, particularly in the field of power generation.
ERG’s transformation process has been unique in its sector and is now taken as a benchmark and an instructive case-study for change in general.
The management vision behind the complete shift from being a traditional oil company to being a leading green power provider has intrigued and caught the attention of the media and business strategy experts alike.
ERG have succeeded in reducing its Carbon Index (the amount of CO2 emitted for each kWh produced) by 90% since its entry into the renewables sector. Thanks to its green generation technologies (wind, hydroelectric and photovoltaic) it has helped to avoid the emission of over three million tons of CO2 each year, equivalent to over 800,000 return flights between Rome and New York.
ERG’s ESG performance and business model continues to receive prestigious recognition both in the world of finance and from leading ratings agencies that assess sustainability criteria.
Adaptability maintains green momentum
WITH more than 80 years of experience in the energy sector, the last 20 of which have been spent focused on green energy, ERG is well positioned to expand its leading role as a green energy provider.
Beginning in 2006, ERG’s successful transition to green energy, with a strong focus on wind, has established the company as one of the primary renewable operators in Italy, the leading one in the wind industry, and a top-10 player in the European onshore scene.
This foundation proved to be crucial during a year in which the global pandemic has wreaked havoc on the world economy. This created and continues to create major problems for energy providers around the world.
ERG continually assist employees in expanding their skillsets
Fortunately, ERG’s management had the necessary experience and were prepared to take the measures necessary to not only endure but to increase the company’s position in the clean energy sector.
In fact, not only did ERG get through 2020 in good shape, it achieved some important results along the way.
For a start, the company ensured both its business continuity and the safety of its staff through relocating and managing office work from home.
This was done through the deployment of effective IT measures and the rapid upskilling of staff, assisted by the reliability of ERG’s modern, renewable power plants.
During the year ERG managed to further reduce the cost of debt through a major green finance deal. At the same time, it continued greenfield development abroad and achieved important recognition for the company’s strong ESG Commitments.
Most importantly, the company got through the period without any layoffs and without using furlough schemes. There were even some new hires.
On the finance front, in 2020 ERG successfully issued a €500mn 7-year Fixed Green Bond which was in high demand with investors.
The company also took top spot globally in Vigeo’s ranking of corporate reporting on the business impact of Climate Change.
ERG was also given an “A-” rating in the climate change programme promoted by the Carbon Disclosure Project (CDP) – with a maximum score in Governance and Risk Management.
Lifespan is extended by ‘repowering’ windfarms
THE nature of a fast moving, technically sophisticated field like onshore wind, is that turbines and control equipment keep getting more powerful.
This means that the machinery from first and second generation of wind farms, installed years ago, become obsolete and need replacing.
ERG has addressed this opportunity by pioneering new ways of upgrading ageing wind farms by ‘repowering’ them. This is a process in which the old wind turbines are dismantled and replaced with technologically advanced new turbines.
As ERG explains, this process extends the lifespan of a wind farm and can increase electricity production from the site fourfold.
It also means that the number of wind turbines on the site can be reduced by up to half their number, lessening the visual effect of the windfarm site on the surrounding landscape.
The amount of land needed for the repowered site remains almost unchanged.
This stems from the fact that many existing infrastructures, such as substations, cable ducts, and access roads, can be partly reutilised.
However, ERG points out that to make the repowering of earlier wind farms efficient, governments need to adjust their planning procedures.
Specifically, they need to recognise that this is merely an upgrade of an existing site, and operators should not be required to redo all the previous work done to secure site planning and approval.
This will achieve significant cost savings for operators who would otherwise be looking at costs that would be equivalent to them building a new greenfield wind farm.
Worldwide energy demand is rising rapidly. The only way to reduce the emissions that cause climate change is by transitioning towards a substantially decarbonised economy.
To achieve these goals, the growth of renewables and energy efficiency will be key factors.
Onshore wind has a key role to play in helping countries to achieve this transition, ERG notes.
This article was brought to you in association with ERG as part of The ‘s Climate For Change campaign