Production curtailment imposed by the Brazilian grid operator
Production curtailment imposed by the
Brazilian grid operator
Voltalia (Euronext Paris, ISIN code:
FR0011995588), an international player in renewable energy,
announces that the Brazilian transmission system operator is
currently imposing a pronounced curtailment in certain parts of the
network, which would have a strong impact on Voltalia's 2024 EBITDA
if it were to be extended over the coming months and if it is not
financially compensated. Voltalia is carrying out a series of
actions to reduce the duration of this curtailment and to be
financially compensated.
For a transmission system operator, curtailment
consists in limiting the transmission, for a given period, of all
or part of the electricity production potential of a power plant,
in order to maintain the stability of the transmission network.
In Brazil, like other major global power grids,
curtailment has been rare in previous decades. However, following a
blackout in August 2023, the Brazilian operator began capping an
unusually high part of production to minimize the risks of
instability. As the network proved to be stable, curtailment
gradually decreased to become marginal at the end of 2023.
Noting the resumption of a pronounced level of
curtailment, Voltalia met several times with the Brazilian
transmission network operator. Voltalia's production curtailment
volume in the northeast of the grid could be high for a period that
could last several months, in particular due to the delay in the
construction of new transmission lines to strengthen the grid in
the northeast of the country.
Voltalia, within a collective of electricity
producers and through professional associations, as well as
directly, is currently carrying out a series of initiatives in
Brazil:
- Several litigation
actions, already initiated in 2023, are underway before the federal
and local courts, with the law providing for financial compensation
applying in particular to Voltalia's power plants1.
- Constructive
discussions are being held in parallel, with the network operator
and the public authorities in order to accelerate at least a part
of the financial compensation and to reduce the duration of the
current capping.
Voltalia is confident about the effectiveness of
these steps, but it is difficult to establish a precise figure for
the financial effect of the curtailment on the 2024 EBITDA.
Voltalia estimates that, if the scenario communicated by the
network operator were confirmed, if Voltalia was not financially
compensated and if the average EUR/BRL exchange rate for the second
half of the year was around 6, its 2024 EBITDA would be cut by
around 40 million euros.
In the first half of 2024, Brazilian curtailment
was low and in line with Voltalia's forecasts. For the same period,
Voltalia expects consolidated EBITDA for the Group of around
75 million euros2, up +33% compared to the
first half of 2023.
In the second half of the year, the impact of
the current curtailment would be accentuated by the seasonality of
production, which is traditionally higher in the second half of the
year than in the first, and by wind and solar resources, which are
expected to be above the long-term average in the second half of
2024, given the levels observed since the beginning of July and
forecast until the end of December by weather forecasting
institutes.
Professional organisations bringing together
electricity producers such as Voltalia, consider that the extreme
caution applied by the network operator would not be technically
required. The loss of electricity production potential, ultimately
bad for the Brazilian economy, would therefore be avoidable. Like
Voltalia, they believe that producers should be financially
compensated, as demonstrated by the legal action they have
initiated.
Voltalia is confident that technical and
financial solutions will be found. Voltalia therefore reaffirms its
2027 ambitions, and in particular its normalised
EBITDA3 ambition of around 475 million
euros, including around 430 million euros from Energy
Sales.
Voltalia also reiterates its capacity
objectives:
- In 2024: capacity
in operation and under construction at approximately
3.3 GW, of which around
2.5 GW in operation.
- In 2027: more than
5 GW in operation and under construction, of which
around 4.2 GW in operation.
Sébastien Clerc, Chief Executive Officer of
Voltalia, says: « Although we are surprised by the
announcement of an abnormally high level of curtailment in Brazil,
we are confident in the effectiveness of Voltalia's collective and
specific actions aimed at minimizing it and having it financially
compensated. We will keep our shareholders informed as progress is
made. »
Next meeting: Half-year results
2024, September 5, 2024 (before market opens)
PROSPECTIVE
STATEMENTS
This press release
contains forward-looking statements. These statements are not
historical facts. These statements include projections and
estimates and their underlying assumptions, statements regarding
plans, objectives, intentions and expectations with respect to
future financial results, events, operations, services, product
development and potential, and statements regarding future
performance. These forward-looking statements may often be
identified by the words "expect", "anticipate", "believe",
"intend", "estimate" or "plan", as well as by other similar words.
Although Voltalia's management believes that these forward-looking
statements are reasonable, investors are cautioned that
forward-looking statements are subject to numerous risks and
uncertainties, many of which are difficult to predict and generally
beyond Voltalia's control, that could cause actual results and
events to differ materially from those expressed in, or implied or
projected by, the forward-looking information and statements. These
risks and uncertainties include, among others, the uncertainties
inherent in the evolution of the selling price of electricity
produced by Voltalia, the evolution of the regulatory environment
in which Voltalia operates as well as the competitiveness of
renewable energies and other factors that may affect the production
capacity or profitability of Voltalia's production sites as well as
those developed or identified in Voltalia's public filings with the
Autorité des marchés financiers including those listed in section
2. 2 "Risk Factors" of Voltalia's 2023 Universal Registration
Document filed with the Autorité des marchés financiers on April
12, 2024. Voltalia undertakes no obligation to update any
forward-looking information or statements, except as required by
law.
About Voltalia
(www.voltalia.com) |
Voltalia is an international player in renewable energies. The
Group produces and sells electricity from its wind, solar, hydro,
biomass and storage facilities. It has 3.1 GW of capacity in
operation and under construction, and a portfolio of projects under
development with a total capacity of 16.6 GW.
Voltalia is also a service provider, supporting its renewable
energy customers at every stage of their projects, from design to
operation and maintenance.
A pioneer in the business market, Voltalia offers a comprehensive
range of services to businesses, from the supply of green
electricity to energy efficiency services and the local production
of its own electricity.
With more than 1,850 employees in 20 countries on 3 continents,
Voltalia has the capacity to act globally on behalf of its
customers.
Voltalia is listed on the Euronext regulated market in Paris
(FR0011995588 - VLTSA) and is included in the Enternext Tech 40 and
CAC Mid&Small indices. The company is also included in the
Gaïa-Index, the responsible mid-cap index. |
Voltalia
Email: invest@voltalia.com
T. +33 (0)1 81 70 37 00 |
Press Relations Seitosei.Actifin - Jennifer Jullia
jennifer.jullia@seitosei-actifin.com
T. +33 (0)1 56 88 11 19 |
1 For both 2023 and 2024 curtailment
2 Results for the first half of 2024 will be announced
on September 5, 2024 (before trading). The financial statements,
for which audit procedures are underway, have not yet been
finalized. The figures presented are estimates.
3 "Normalised EBITDA" of 2027 calculated with an average
annual EUR/BRL exchange rate of 5.5 and wind, solar and hydro
production corresponding to the long-term average
- Production curtailment imposed by the Brazilian grid
operator
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