From Importations to Development, Organic Growth Continues

Q: What added value is Risen Energy introducing to the Mexican energy industry?
A: Risen Energy has gathered a great deal of experience and knowledge in more mature energy markets, which is being used as leverage to enter new markets and become a stronger player. In 2015, the company started operations in Mexico by importing and commercializing PV modules. Over the years, we have developed business divisions in project development, EPC services and even project start-up. We did this with the objective of becoming more flexible and gaining a presence across a wider spectrum of the energy value chain, therefore creating more value than if it were just a PV modules manufacturer. Ultimately, this makes us more profitable because we are interacting in different aspects of the projects. In Mexico, we have a team of 12 people with broad experience in the energy market. Since our expertise is in the development end, we prefer to leave legal and financing elements to third parties.
Q: What is Risen developing at the moment in Mexico, and how will these activities help the company reach its 2019 targets?
A: We are developing a solar park in Guanajuato. When we started, the projected installed capacity was 275MW but due to problems with land owners we had to cut it down to 150MW. With this new installed capacity, we will have the permits and everything that is needed to start the project by the end of 2018. We expect to start construction in 1Q19. Our objective is to have this PV park up and running by the end of 2019 with a defined commercialization scheme, be it under a PPA, as market participants or as a QSS.
We have an ambitious plan to develop 1GW in Mexico by the end of 2019. Although it will be hard to achieve, we are in the process of closing three projects with a total capacity of 600MW, another of 100MW and the 150MW project in Guanajuato. If we can close these deals soon, we could reach almost 85 percent of our target by the end of 2019.
Q: What challenges has Risen faced in Mexico when developing PV projects?
A: We are greatly interested in purchasing legacy projects and developing small production projects, mainly for self-consumption. One of the legacy projects we purchased appeared to come with everything needed to start construction. In reality, important paperwork related to land ownership was missing. It has been extremely difficult to manage this situation with our headquarters in China since our team over there sees signed contracts and permits but does not necessarily understand the reality of the industry in Mexico and the reasons why we had to delay the beginning of construction. It is unfortunate that the documentary evidence says one thing but the real story is different.
Legacy projects are an interesting business model to approach since they require less due diligence in several areas, such as interconnection, energy purchase or even land ownership. We decided not to go into the long-term electricity auctions precisely due to the extremely low-priced bids and the problems we foresaw could arise, particularly with due diligence activities. This is why we prefer to purchase legacy projects that already have a bilateral contract or a PPA scheme.
Q: What technology advancements is Risen working on at a global level?
A: While bifacial modules seem to be the buzzword of the moment, we do not manufacture them yet because this technology does not have a certification for the amount of power it produces. It makes no sense to manufacture them yet because, although they can truly produce more energy, they cannot be certified and would not be considered in the contracts. It is also clear that batteries are the future. Our headquarters has decided to invest in that area and acquire a company that commercializes batteries to make our projects more integral. In terms of production capacity, we are building a new factory that will allow us to double our production capacity by the end of 2019.