European Energy
European Energy Building Lasting Impact in Green Transition
‘The power of tomorrow, today’ is being delivered by European Energy, as it continues on its longstanding mission of bringing clean, green energy to various global markets with a turnkey project approach. Director and Country Manager for Iberia, Enrique Galdos talks to Energy Focus about this unique and exciting business that is already ahead of the pack in the energy transition.
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Enabling the green transition is the core vision and purpose of many companies, and many make an impact. But few have the credentials of European Energy, and few can claim to have made an impact on the same scale.
Headquartered in Denmark, but with offices around the world, European Energy is a developer of renewable energy projects, focussing specifically on solar, onshore wind, offshore wind, and power-to-x technologies.
Established in 2004, the company is heading into the year of its 20th anniversary in great shape, posting record results including revenue of €438 million and profit of €110 million in 2022.
When Erik Andersen and Mikael Pedersen founded the business, the idea was to bring alternative energy solutions to markets in Europe dominated by coal, oil, and nuclear. While progress has been made in the renewable rollout, much remains to be done as European markets remain heavily exposed to fossil fuels and reliant on unsustainable sources.
Europe’s big energy sources (according to the IEA) remain coal, gas, nuclear, and oil. Wind, solar, biofuels, and waste make up a small percentage, with modest progress since 1990.
To succeed in its vision to be a major global force in driving the green transition, European Energy has had to convince investors of the returns available in renewable energy and then demonstrate the effectiveness of generating capacity in a time when every megawatt counts. By handling the entire value chain from concept generation and planning through to design, construction, development, financing, and ongoing maintenance and asset management, European Energy is perfectly placed to take on this tough task.
CLEAN PORTFOLIO
In Italy, the company recently sold a 103 MW solar farm (Troia), home to 275,000 solar panels. “We can see from this divestment that demand for more renewable energy is high, and we will continue to be at the forefront of green investments in both Italy and the rest of the world to accelerate the green transition,” said CEO Erik Andersen.
In Denmark, the company recently commissioned the 101 MW Kvosted solar farm, capable of producing enough energy to supply 22,000 households.
Earlier this year, in Brazil, European Energy connected the 36MW Ouro Branco I wind farm, with a large pipeline of further development in the country.
In Lithuania, where the energy mix is quickly changing, the Anykščiai wind farm provides power to 73,000 households and European Energy has a strong team in place to take advantage of opportunities. “This project in Anykščiai is our first wind farm project in the country, and I hope that we can contribute even more to the high green ambitions that the Lithuanian government has set,” said Andersen.
Across the Iberian peninsula, renewable energy is an obvious solution, with significant sunshine hours each year, and a long coastline suited to wind energy activity. European Energy has an office in Barcelona from which several projects are overseen, and Spain is a great example of where government policy, population ambition, and common sense have come together to transform the energy mix, growing from around 20% to more than 40% generation between 2008 and 2022. Enrique Galdos is the County Manager and Director for European Energy in Iberia and he explains that power-to-x (PtX) will be game changing in his territory and beyond.
“Our core business is as developers, but we do the full chain. We develop our own projects, provide our own equity, and source the short- and long-term finance internally and with external partners. When it comes to construction we try as much as possible to be our own EPC. In terms of strategy around saving energy, we have had good success with BPA with Nissan, Google, Apple and more,” he says of the group.
“The company has grown a lot. I started 15 years ago as employee number 12. Three years ago, we had 200 people, and now we have 650 people, active in 25 countries with 22 offices, mostly in Europe but with presence in Australia, America, and Brazil,” he adds.
KASSØ PTX
PtX projects are already confirmed for 2023, with Denmark home to the first for European Energy. The concept involves using renewable energy to create electricity which is combined with water for the production of green hydrogen. This can then be engineered with biogenic CO2 to produce e-methanol.
“We are making the biggest e-methanol and hydrogen power plant right now which consists of 300MW of wind, 50MW from an electrolyser, CO2 capture, with a e-methanol facility. We have already signed agreements with companies including Maersk, Novo Nordisk, LEGO Group, Circle K and more.
“We believe in renewables but we are pioneers in PtX,” says Galdos. “We are amongst the first companies in the world to invest in this at scale and so we are providing practical knowledge on how to do things. While I’m sure there is theoretical knowledge, we are pioneers to complete a project on this scale.”
By creating e-methanol, described by European Energy as a fuel of tomorrow, the company believes it can gain a first-mover advantage as a lead supplier of a reliable alternative to fossil fuels used in shipping and other transport today.
“E-methanol is 100% renewable and combustible, and a direct alternative for diesel. Maersk has already committed by 2030 to use e-methanol to lower their carbon footprint,” confirms Galdos. “They have already ordered new vessels that will run on e-methanol. If e-methanol becomes as big as many players think it will then it could become a global alternative for diesel. That is where we are aiming, and we see big facilities making e-methanol in different areas around the world. In the future or mid-term it could be traded in the same way we trade oil.”
Spain and Portugal are tactically placed on the world map for shipping companies, and have green energy production in abundance making them preferable nations for the process of creating e-methanol.
“These were some of the first countries in which you could develop without subsidies,” explains Galdos. “Now, renewables might become less profitable because interest rates are rising and returns for investors go down, and that means we have to reinvent ourselves. But if you have cheap water and cheap power, you can make the cheapest hydrogen. If you make cheap hydrogen with biogenic CO2, then you can make the best priced e-methanol compared to other places in the world. Spain and Portugal can potentially be a big hub for e-methanol as they are strategically positioned and have the best resource. As long as we bring the cheapest price, it will bring a lot of investment in industry.”
At the Kassø solar farm in Denmark – European Energy’s 300MW PV plant in the south of the country – a 32,000 metric tonne, carbon neutral, PtX facility is nearing completion. The largest commercial e-methanol plant in the world, this is a major step forward in the decarbonisation of global freight. The project involves 900 pipe spools, 17 km of underground pipes and 2,200 valves. More than 100 larger procurement agreements have been facilitated for the project.
“It is opening so many doors for us to partner with new players. Many companies are interested in partnering with us,” says Galdos.
SUN & WIND
In traditional renewable energy projects, European Energy remains focussed on the ever-reliable sun and wind.
In Madrid, in October, an international energy summit will host delegates from around the world, just before the COP28 Climate Change Conference. The urgency of accelerating the clean energy transition will be discussed and the priority of limiting global warming to 1.5°C will be readdressed. At the same time, European Energy will be busy with around 50 projects across Spain and Portugal, with just over 3GW in various stages of development across different technologies.
“We are making a difference. We have been active in Spain since 2007. In the first round of renewables we did around 14 projects with an investment of €65 million,” highlights Galdos. “The capacity that has been installed in Spain for PV and wind in the past three years is very good and one of the highest in Europe.”
Typically, the company takes a strategy of owning the entire project and bringing it to fruition, before selling 50% to release funding for organic growth. This model has been highly successful and has fuelled European energy’s rapid expansion.
“This year, we have more than 1GW in construction in six different countries, and we have reached the milestone of having more than 1GW of projects in operation. Our turnover comes from two sources – selling power but also selling projects,” details Galdos.
“Every year has been better than the previous, and last year was our record yea. We have always reinvested profits and we want to continue to grow the company with entrepreneurial spirit, even though we have grown so much. We like to be a part of the green transition – we want to be a part of the change and that is why we are working with all the technologies that we are.”
In Q2 2023, European Energy continued to display strong financial performance, highlighting exactly what is possible for effective renewable energy project businesses. Q2 EBITDA and profit before tax both grew by more than 200% to €36.1 million and €21.7 million respectively.
Key in sustaining this impressive growth is agility and entrepreneurial spirit. “That differentiates us from other players,” says Galdos. “We all want to be enablers of the green transition but each company has their own way. We must keep our DNA and value and culture. We must focus on the markets where we are now as there are a lot of chances to keep growing in all of them.”
European Energy aims to grow into a global force that champions the green transition, develops green energy solutions and encourages the world to join the movement towards a fossil free society. Galdos and the rest of the team are driven by the enthusiasm and passion of the senior management, which retains ownership to ensure nurturing of that entrepreneurial attitude.
“The owners are the management and they are very inspiring leaders. It is fantastic to work with people like this and they bring energy to the company. We have strong values, we really believe in the green transition, we want to be enablers for other companies to do things with us, and we want to make changes for the better,” says Galdos.
With 987 MW under construction at the end of Q2 2023, and a significant potion set to be ready by year-end, European Energy is truly enabling the transition and creating a lasting impact.
