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Interview

Ana Maria Machando Feirreira, CEO, EDP Energias do Brasil

01.07.2013 / Energyboardroom

You have been the CEO of EDP Renovaveis during three years and in 2013 you are celebrating one year at the head of EDP do Brasil. How has this year been for you ?

Since I arrived, I have witnessed many changes on an industry and company level. Our industrial operations which consolidate assets in generation, distribution, commercialization and transmission projects always need to be remodeled and improved to meet the expectations of our clients and finding the right balance between these activities is essential. Therefore, I have been focusing on improving our processes and redefining the importance of these assets. Transmission business was never our priority and therefore, we go on focusing primarily on generation, distribution and commercialization, in addition, of services.

On an organizational level, we have set our objectives for the few years to come both in terms of human resources and financial goals..

Overall, we are confident in our ability to face the market changes and our new offices give us a better working environment and collaborative space to work more efficiently as a group.

Until 2020, the government is planning to invest USD 160 billion in the energy sector. What are your views on how the country will manage to modernize its infrastructure, being such a large and diversified country?

The country currently endures a construction phase for some years to come, especially with the international events in 2014 and 2016. One of the challenges our industry is currently facing, when we speak about projects and construction development and management, is the lack of qualified engineers. Brazil does not hold enough specialists and therefore we are requiring a large number of highly specialized engineers and experienced C-level managers from other countries. These engineers and managers are mainly coming from Europe.

We are also in need of finding large amounts of hydro projects workers with the right qualifications. To ensure the safety of our projects, the workers are assisting the programs months prior to the project to ensure the highest level of safety and working measures. For instance, in our hydropower project in Amapá, the government requested that a minimum of 60 percent of our project workforce for that project had to be taken locally; therefore we have been training local people to hold the right qualifications to work for us.

EDP operates wind farms, small and large hydro power plants as well as a thermal power plant. In light of the importance of renewable energies in Brazil, how have these defined EDP’s business over time?

All these activities are important, however we put a much stronger emphasis on hydro power since this source still remains the main generator of electricity in the country – over 70 percent.

EDP Brazil has been following the European model, slowly adapting to the renewable model. In 2005, renewable sources for the EDP Group only represented between 35 to 40 percent of our portfolio whereas today we are above 70 to 80 percent. Our group has given us the directives to grow our renewable market and this is necessary to adapt to our local needs, renewables meaning hydro, wind and solar at least. Hence, being an environmentally respected company is always a positive factor to our group.

Wind has become a fast growing source of energy since its first auction took place in 2009. Although we could not participate in this auction at that time as we were not sure about the real potential of this source, it became clear after some time that wind power had to be part of our energy portfolio. The wind in the Northeast of the country is extremely consistent, steady and of high value for our wind parks. Brazil’s wind power capacity is immense and being an active player in this segment is a necessity. EDP Group currently is the third largest generator of wind power globally and we intend to continue actively pursuing this energy.

In the future, the growth of hydro power might be put on hold considering the reservoir challenges the country is facing. Thermal power seems on the right path to become a much stronger option for the future. Nevertheless, it is difficult to foresee which sources will fuel these thermal power plants and whether the technology is sufficient to improve the efficiency needed for them.

Mr. José da Costa Carvalho, President of Eletrobras mentioned the role of innovation to develop new, smarter and efficient solutions to be more competitive in the market. How do you implement innovative techniques to your portfolio?

We rely on technologies that are offered to us by international suppliers. Of course, we always purchase the technologies which have the best value for our projects, since efficiency rates of our hydro, thermal and wind plants depend on them.

One important point I would like to stress is that currently coal seems to be regaining strength and could play an important part for the next 10 years. However, the current technology is not sufficient to fulfill a clean coal usage and Brazil, I think, will always look at this source very carefully and with the necessary restrictions.

Among the recent projects EDP manages here – HPP Santo Antonio do Jari, HPP Cachoeira Caldeiro and Porto do Pecem thermal power plant – what have been the challenges at hand?

These projects and the hydropower sector in general are under heavy scrutiny and the government keeps announcing measures about the role of reservoirs for the country. My belief is that hydropower and reservoirs are intertwined and cannot be separated. These reservoirs although dependable on weather conditions, are of high value and provide very large amounts of electricity throughout the country.

Belo Monte is Brazil’s second biggest hydropower station and despite the ongoing troubling affairs, its presence in the future will be indispensable for the country. As an industry we need to make sure that we send a strong message to the local communities to show them how these projects can improve their lives, without jeopardizing the environment.

In addition, current regulations for development of hydropower projects are very strict, including environmental and social responsibility measures. The latter also involves relocating families and helping neighboring communities living along the river. For instance, we are building Santo Antonio do Jari plant and , our environmental license does not require us to provide electricity to the local communities. However, EDP created a pioneer project to support these communities and give them the chance to have electricity. We are not obliged by law to give electricity to these communities, but we have decided to offer this new facilities to them, being the respective investment already contemplated within the global CAPEX, that is when the Project profitability is accessed, this item was already included. No one should be living in the darkness half of the day.

If we were to come back in five years’ time, where would you like us to find EDP Energias do Brasil?

Energias do Brasil will maintain investments in renewable markets (understood as above), fulfilling our group’s strategy to become a highly recognized renewable investor around the globe.

In the near future we also wish to push our presence in commercialization of energy and related services. The free market already representing 25 per cent of the total market has yet room to grow further significantly. Overall, since the development of our commercialization area in 2001, our performance has been significant. We are the 3rd player as of today in this segment.

Moreover, my three main priorities for the coming years are energy contracts, clients and highly skilled personnel. These are simple yet crucial objectives for the growth of our company. We cannot stress enough how crucial it is to understand the local culture and the business environment. They truly make a difference in our business.

With our existing diversified portfolio, in hydropower, thermal and wind plants , we feel we have the right product mix, which, combined with our objective to constantly search for profitable projects, will allow us to create more value for the shareholder and other significant stakeholders.

To read more articles and interviews from Brazil, and to download the latest report on the country, click here.

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