Let's talk about... Poland

... with Nicola Riccardi, Head of Business Operation Europe - ERG Renew

Nicola, tell us about your professional experience and how it happened that you joined the ERG Group. What are your duties today?

After spending several years at Edison, I joined ERG in 2006 and in the beginning I handled planning and emission trading. Then in 2011 I transferred to ERG Renew to attend to LUKERG, the joint venture that we have with LUKOIL for wind power in Romania and Bulgaria. Afterwards, I started to also become involved in the other foreign countries where ERG Renew has operations (as of today, France, Germany and Poland) in terms of both managing the existing assets and developing new initiatives.

Today the ERG Group is one of the top ten onshore wind power operators in Europe...what significance does investing abroad take on?

Entering into a new country first of all means understanding its specific characteristics in terms of regulatory system and market dynamics. The wind power business is, in fact, still regulated and, although to a lesser extent than in the past, tied to the incentive system. In this sense, growth abroad represents a diversification with respect to ERG Renew's presence in Italy today.
In 2014 we entered the Polish wind power market, which we consider interesting and with good prospects for growth even in the mid-term, even though it is presently going through a period of transition from a green certificate incentive-based mechanism to one based on auctions.

Can you tell us something about the construction of the Radziejow wind farm?

Situated in the municipality of Radziejòw about 250 km from Warsaw, the farm consists of 21 Vestas V90 90 wind turbines and when fully operational, it will produce over 90 GWh per year with a  load factor greater than 28%. Without counting the time the construction site was down (between December and March due to the winter), the works were completed in about 8 months without encountering any particular problems. This was due to a careful selection of the contractors and constant on-site supervision by ERG Renew to both monitor the progress of the works on a daily basis and to directly manage relations with the developer, companies and local authorities.

While we were building the wind farm you are talking about, we acquired another two projects, also in Poland (Szydlowo in February and Slupia in March). Can you tell us something about these, too?

These two projects that are currently under construction are a good example of how ERG Renew was able to seize an opportunity tied to a moment of transition. At the end of 2015 Poland will switch over to a new regulatory system so in order to fall under the current system (which we consider to be better from various points of view), it is necessary that we complete construction of the wind farms by December. The beginning of this year was therefore the "time limit" to start new projects with the goal of completing them by that date, and ERG Renew was very quick and effective in acquiring the projects, securing supply of the turbines and starting the works.

Which aspect of your job do you find to be the most "exciting"?

Probably the fact that we are somewhat "pioneers" in the countries we have gone into. What many operators (especially those that are larger and better structured than us) do first of all when they enter a new market is to set up a branch, transfer personnel and create a team, and only then do they start scouting projects. We did that (and are still doing so) in parallel with the acquisition and execution of projects, meaning that with extremely streamlined teams and structures (although obviously with the total support of headquarters) we have managed all aspects linked to both entering the country and implementing the individual projects.

What are the difficulties you run into most often?

Going into a new country involves tackling lots of new things and risk elements that cannot always be expected beforehand. The daily challenge is therefore to take decisions based on necessarily incomplete knowledge of the environment in which we find ourselves working.

Nicola, what other fronts are you and your team working on?

In addition to Poland, we have been working hard on another two fronts for the last two months. The first is connected with allocating LUKERG Renew wind farms after winding up the joint venture, which was decided in June. The second is the French front, an extremely competitive though very interesting market in which we have just acquired new wind farms already in production to double our operations in terms of installed power. In more general terms, we are strengthening our presence in each one of the countries where we have wind farms in order to be able to manage them directly and more efficiently, and become even better prepared to seize further opportunities for growth.