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November 22nd, 2008

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10 Questions

with Gary Mazzotti
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December 5th, 2007 issue

The renewable power company Energy 21, fresh from launching a solar power plant in Jaroslavice, south Moravia, capable of generating one megawatt of power, has announced plans to increase its power generation to 150 megawatts within the next few years at a cost of 15 billion Kč ($836.1 million). Gary Mazzotti, the company’s new CEO, talks to The Prague Post about the need for guaranteed power prices, the importance of salt and coating former coal mines with solar panels.

Jan Přerovský/THE PRAGUE POST

Mazzotti says Energy 21 should develop as a leader of solar energy in the region.

THE MAZZOTTI FILE

Job title: CEO, Energy 21
Age: 46
Nationality: British
Previous position: Executive director, AAA Auto

➊ What brought you to Energy 21?

I was approached by a good friend who is the CEO of an investment bank. He said to me, “Gary, I have an interesting job in the energy sector. Would you be interested?” I said, “Yes.” [Then he said] “Would you be interested if I told you it was renewable energy?” and I went, “I don’t know.”

I spent three to four nights on the Internet, surfing as much as I could. And it became clear to me that renewable energy, particularly solar energy, is at the forefront of what’s going on in the energy sector. Especially if you look at developments in California, Australia, Spain and Germany — it became clear it was an interesting sector.

Once I started to look into Energy 21, I realized they had already developed a very efficient solar energy power plant. Putting the two together, I thought, “Here’s an interesting possibility to be green that also makes economic sense.” And green power projects, if they make economic sense, will be successful.

➋ Solar power has a negligible share of the local renewable energy market, which is mostly hydroelectric and biomass. Why?

I’d say the share of solar energy is so small that it hardly registers. The technology has not been available. Some of the advances that have been made in the last six months to a year now enable solar energy plants to produce electricity when it’s very cold, when it’s hot or when it’s cloudy. Previously, if it was too cold, hot, or cloudy, the silicon panels would produce nothing. Now, with what’s called thin-membrane technology, it’s possible for these plants to be producing in December, in January, and in 40 C (104 F) in August. The plants are much more efficient.

➌ Does this mean we could see solar power crawling into more northern latitudes?

I think the possibilities of going into southern Poland are significant. We’re looking at Ukraine as well. So who knows? As global warming continues, the unfortunate byproduct of that is that we can continue to expand solar energy northward. Certainly southern Poland and southern Silesia are very interesting.

➍ Following a similar program in Germany, the government now guarantees higher-than-standard prices for renewable energy over the next 15 years. How important is this guarantee?

It’s vitally important. Solar energy plants are based on investment returns over an incredibly long period. Without these feed-in tariffs and guarantees, it’s almost impossible to fund a plant. One megawatt of supply costs more than 100 million Kč [$5.5 million] in investment, and it takes up to 20 years to get a return on that investment. So, without those guarantees, the investment simply wouldn’t happen. The development of the solar market would not happen.

At present, the Czech Republic guarantees prices for the next 15 years. That may be changed in January to 20 years.

➎ Your proposed goal of 150 megawatts is quite ambitious. How many plants will that require?

We would expect about 40 plants to achieve that. In essence, Jaroslavice is one megawatt and takes 4 hectares (10 acres) of land. So one megawatt takes 4 hectares; if you have a 10-megawatt plant, it’d occupy 40 hectares.

We’re trying to put these sites onto brown-field zones that were already commercial. That enables us to look at all sorts of possibilities, such as redundant open-cast coal mines. The Czech Republic has plenty of those. The beauty of these solar plants is that they don’t need to go into green-field situations, they can go into commercial zones — and they’re probably prettier than the existing facilities.

➏ Will these 40 plants be scattered around the country?

The initial focus will have to be on south Moravia, because it has a higher concentration of solar potential. Once the banks and financial institutions see our returns on generating power, we’ll move further. We’ve already looked at sites in south Bohemia. We envision placing sites throughout the Czech Republic.

➐ Do your plants simply plug in to the existing electrical grid?

Yes. In Moravia, E.ON is the distributor and we plug into E.ON and away it goes. Though I think one of the questions today [at the press conference] was very interesting, with regard to whether Energy 21 can supply electricity directly to a local community. Certainly if you look at some other markets in Europe, that is what’s happened, specifically with wind power.

➑ Speaking of wind power, one criticism it and solar share is that they cannot provide a steady source of power — called base load — to feed constant demand. Will solar ever be able to supply constant power?

At this precise moment, solar power is not able to provide base-load supply. Though, if you look at a development in Australia, they are supplying base-load solar power. From what I understand, they’re using the excess heat during the day to melt salts, and during the night hours those salts then release heat to continue energy production 24 hours a day.

So can Energy 21 produce base-load electricity today? No. Do I believe that the technology is changing so quickly that it may be possible in the future? Yes.

➒ You mentioned before that Energy 21 had a particularly Czech solution to solar power. What does that mean?

The group has two companies: There’s Energy 21, which is the developer, and below that the group also owns another company called CE Solar, which is what’s called the system integrator. It’s the company that constructs the site and connects the electricity. There, we have a couple of experienced electrical engineers and they’ve been working on a technical solution for the solar power market for a number of years. We believe the solution they’ve come up with gives us a competitive advantage on the market.

➓ You mentioned plans to expand into Greece, Spain and Portugal, in addition to Central Europe. Why?

Spain, Greece and Portugal have the most advanced solar markets and the most advanced feed-in tariffs. The investors feel we should have a presence on those markets. There’s still room there to grow. Strategically, it helps our experience.

In the long term, I feel Energy 21 should develop as a leader in Central and Eastern Europe. There are some large solar energy companies concentrating on Germany, Spain and Portugal, but nobody is concentrating on this region. Sensibly, my feeling is that Energy 21 should make this region our own.

Do you want your manager to answer our 10 Questions? Send a message to Paul Voosen at pvoosen@praguepost.com

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