Around the world, consumer behavior is undergoing a dramatic change. Purchasing has become a political act, with those brands that seek to make the world a better place being rewarded by growing sales and increased customer loyalty. In this focus on Latin America, we look at how, as the region’s population seeks to buy the change they want to see for the future, companies must improve on sustainability and environmental issues – or risk losing out.

THE EVOLUTION OF THE GREEN CONSUMER

In recent years, shoppers worldwide have begun to understand that their purchasing power can make change happen. Consumers are calling for businesses to put their values on display, and rewarding those who align with their values.

This is a paradigm shift from the consumer activism of yesteryear when brand boycotts were a means of applying pressure on big firms. In a recent report by research firm Weber Shandwick on this changing landscape, it was found that 83% of consumers now prefer positive activism – showing support for companies by buying from them, rather than avoiding those whose practices they disagree with.

In today’s hyperconnected world, where purchasing decisions are influenced as much by social media as by advertising, the impact of consumer support on a brand’s reputation is immense. And while consumer activism takes many forms, it is increasingly a companies’ environmental and sustainability performance that shoppers are honing in on, with consumer insights company Nielsen calculating a near-50% jump in sustainable product sales in 2021, as compared to 2014. 

LATIN AMERICA TAKES THE LEAD

In its 2019 report, Nielsen found Latin America to be ahead of the global curve when it comes to sustainable consumption. Fully 85% of Latin American consumers said that they would definitely or probably change their consumption habits to reduce their impact on the environment – versus just 73% globally.

While the majority of consumer efforts are still focused on tangible gains – such as selecting products with recyclable or less packaging, a growing trend has emerged with consumers seeking out companies who go even further

In 2018, Colombian food company Tosh became the country’s first major brand to become certified as carbon neutral, offsetting 17,000 tons of CO2 each year and overhauling its branding to demonstrate its sustainability credentials to customers. Meanwhile, Brazil’s largest cosmetics multinational, Natura, strictly controls and monitors all carbon emissions relating to its packaging, logistics, production, and transport processes. And a few years ago Chile became the home of the world’s first carbon-neutral wine.

This focus on carbon neutrality is also starting to filter through to corporate energy consumption. In the face of consumer pressure to go green and reduce their impact on the environment, multinational consumer goods brands and manufacturers that have set up bases in Latin America must change their approach and rethink where they source their electricity needs from.

This is the beginning of an unstoppable transformation. Consumers no longer simply want sustainable products – they want the companies they are buying from to be sustainable all the way through their corporate operations. In fact, this trend is even more evident in Latin America than in other global regions, largely because the impact of climate change is already making itself felt – from melting Andean glaciers to extreme weather events. When asked by LAPOP’s AmericasBarometer how serious a problem climate change is in their country, 75% of South Americans and 82% of Mexicans and Central Americans characterized it as “very serious” – compared to just 40% in the United States and Canada.

This is also a generational shift – the latest Global Sustainable Shoppers Report carried out by Nielsen showed that 85% of Latin American millennials (those born in the 1980s and early 1990s) are concerned about how sustainable companies’ production processes are, versus 72% of their parent’s generation, the baby boomers. And if the upswing in climate activism we have seen from generation Z so far is anything to go by, this trend will only continue.

THE EVENTS OF 2020 ACCELERATED THE TREND

There is, of course, another factor driving increased consumer consciousness around sustainability. The COVID-19 pandemic has demonstrated unequivocally the relationship between humans and the natural world, as well as the degree to which everyone on earth is interconnected. As a result, for consumers, the sustainability agenda has taken on new importance. 

A recent survey by consulting firm BCG found that nine-tenths of consumer respondents said that they were equally or more concerned about environmental issues in the wake of the virus outbreak, and nearly 95% said they believed their personal actions could help reduce unsustainable waste, tackle climate change, and protect wildlife and biodiversity. Almost a third said that this belief had strengthened as a result of the crisis.

However, as companies continue to struggle with the lingering impacts of movement restrictions, supply chain disruptions, and slumping demand caused by the pandemic, prioritizing sustainability and environmental performance is, for many, last on the list.

We believe that would be a mistake. Consumer pressure isn’t going away – it’s only increasing. Companies that sideline their efforts now are likely storing up risks for the future, while those that choose to re-engage with sustainability initiatives will gain a distinct competitive advantage.

RENEWABLE ENERGY – A SOLID STRATEGY

A pragmatic way to achieve the kind of sustainability that consumers increasingly expect is to look at what can garner the greatest impact on carbon emissions. For the vast majority of companies, that’s their energy consumption, which is why, right across the region, a growing number of firms are shifting to renewables, and civil society is stepping up to support them.

Indeed, companies in Latin America are at a comparative advantage versus many of their counterparts around the world. Ample renewable resources along with an enabling regulatory framework in many countries have paved the way for more and more corporate energy users to go green. 

This growing interest has driven a surge in the number of corporate power purchase agreements (PPAs) for renewable energy, with 2019 witnessing a threefold increase in deals signed. A tailor-made contract between a corporate off-taker and a power producer, renewable PPAs allow companies to purchase or generate enough renewable energy to match 100 percent or more of their electricity use over the course of the year, allowing them to ensure the very basis of their operations is sustainable. 

Our team, for example, was the first to implement a solar private PPA in Chile some eight years ago, and we’ve since replicated this success in Brazil and Mexico. In 2020, Atlas Renewable Energy signed over 660MW in corporate PPAs in Latin America, making us the top developer in the region by contracted volume, according to Bloomberg. As companies adjust to new consumer demands, we’re seeing an increasing number of inquiries by business leaders asking how they can harness renewable energy to meet their ESG objectives. The numbers are clear: According to a recent study by Stanford University which looked at the impact on companies’ carbon emissions by switching to renewables, a 100% solar strategy would reduce annual carbon emissions by as much as 119% of a company’s carbon footprint – leading to a huge leap forward in its environmental performance. 

The new green consumer of today doesn’t just want to know the origins of what they buy, or how it’s packaged. They want to see real commitments by companies that they are doing everything they can to minimize their impact on the environment. Sustainability is no longer an add-on, and we believe that a solid energy strategy with renewables at its core should be a foundational pillar of a companies’ efforts to respond to consumer demands.

Even as the Covid-19 pandemic drove the global economy into a recession, 2020 was a good year for renewable energy as an asset class. With new tailwinds promising to bolster the sector, we believe that 2021 will see an even greater upswing of interest from the capital markets.

Despite numerous headwinds, the global economy continued its transition toward renewable energy in 2020, with a record amount of new installed capacity around the world. The health of the sector stood in sharp contrast to both infrastructure and fossil fuels, and the subsequent flight to quality translated into floods of capital as installations continued to rise in spite of the economic and social disruptions caused by the coronavirus pandemic.

Overall, low-carbon investments – which cover renewable power and other technologies that reduce reliance on fossil fuels – increased by 9% in 2020, according to an analysis by Bloomberg New Energy Finance (BNEF). And this upward trend looks set to continue. According to a recent survey by Octopus Capital, global institutional investors plan to increase their allocation to green energy from 4.2% of their overall portfolio to 8.3% in the next five years, and 10.8% in the next decade. 

AN ATTRACTIVE OPTION

One of the key drivers behind this is the surging demand for clean energy amid political pressure to meet the ambitious objectives of the Paris Agreement, an international climate commitment to keep the global temperature increases below 2%. According to Goldman Sachs, meeting those commitments will require up to US$30tn in clean-energy infrastructure investments by 2040 alone. The investment bank expects this clear growth trajectory to push spending for renewable power projects above spending on upstream oil and gas this year – the first time in history that this has been the case.

PREDICTABLE, STABLE, AND COMPETITIVE

But beyond growing demand for renewables, there are numerous other factors at play that are driving greater numbers of investors to enter the sector. The first is its stability. Traditional energy producers rarely enter pricing contracts that span decades. Renewables producers, on the other hand, can, thanks to the inexhaustibility of their energy sources.

The Octopus Capital poll, which covered investors from across the globe with combined total assets of US$6.9tn, found that more than half of respondents view the predictability of green energy as a reason to capitalize on the market. Historically, and as was best illustrated with the unprecedented day in 2020 when the oil price turned negative, prices of fossil fuels, and by extension, fossil fuel-based electricity, have been wildly volatile. 

The cost of renewables, meanwhile, has become increasingly competitive with fossil fuels, as new technologies including bifacial solar panels and trackers are helping improve efficiency. Consequently, the levelized cost of energy (LCOE) from solar has plummeted from US$359 in 2009 to an average of US$40 a decade later – an 89% drop. According to Marcel Alers, UNDP head of energy, “It is now cheaper to go solar  than to build new coal power plants in most countries, and solar is now  the cheapest electricity in history.”

Investors are also being drawn in by the promise of outsized government spending and tax breaks for green projects, as economies worldwide seek to return to growth. For example, upon taking office, newly-elected US President Joe Biden unveiled a US$2tn clean energy investment plan, aiming for 100% clean electricity by 2035. Meanwhile, on the other side of the Atlantic, the European Union’s Green Deal includes US$572 billion earmarked for spending on green projects, among them renewable energy generation. 

RISK VERSUS REWARD

Another factor is the risk involved in fossil fuels versus renewables. A recent study by the University of Oxford’s Institute for Energy Studies asked institutional investors including asset managers, hedge funds, and private equity investors in the US and Europe what the minimum hurdle rate they would require to invest in different energy projects, and found that investors are now expecting higher risks in oil and gas projects in comparison to solar and wind projects. 

Indeed, for 2021, Goldman Sachs puts the hurdle rate for today’s fossil fuel projects at up to 20%, versus just 3-5% for renewables, demonstrating not only that issues such as the potential for stranded fossil fuel assets have become a key concern, but also that renewable energy is no longer seen as a fringe bet, but rather a mainstream asset class.

The macroeconomic outlook also favors renewables. As governments continue to implement Covid-related financial packages, interest rates are set to stay lower for longer. Meanwhile, stalled economic expansion has resulted in a general scarcity of high-yielding investment opportunities, leaving investors seeking out long-term, low-risk investment – which renewable projects, and solar in particular – offer in spades.

As a result, half of the investors surveyed by Octopus Capital said they expect renewable energy to generate market-beating net annual returns of 5-10% over the next 12 months, and fully 80% saying they plan to increase allocations in this sector over the next three to five years.

In Latin America, we are seeing a similar trend play out as investors seek out opportunities in renewables to meet their quest for yield. In particular, projects with revenue opportunities that are contracted for longer periods of time, and for a greater proportion of generating capacity, are becoming increasingly attractive.

GOING GREEN HAS BECOME AN IMPERATIVE

The near-inevitability of carbon pricing as well as growing pressure on firms to report on climate risk have also seen investors begin to refine their portfolios in order to avoid future losses, shifting away from fossil fuels, both upstream oil and coal, and replacing these with green plays. 

According to BlackRock, the world’s largest asset manager, from January through November 2020 investors in mutual funds and ETFs invested US$288bn globally in sustainable assets, a 96% increase over the whole of 2019. In his recent 2021 letter to CEOs, Larry Fink, the firm’s chairman, and CEO announced the firm would now implement a “heightened-scrutiny model” in its active portfolios as a framework for managing holdings that pose significant climate risk, including flagging holdings for a potential exit.  

Certified green investments in line with standards such as the Green Bond Principles and Green Loan Principles are also taking hold within the market. At Atlas, we have implemented our Green Finance Framework in our recently announced projects, and we are seeing a growing trend in the number of investors who seek to participate in green finance instruments, including bonds and loans.

Accordingly, as investors take stock of the extent to which climate risk is investment risk, renewables projects have become an attractive alternative for infrastructure and energy investors alike.  

A BRIGHT FUTURE

Against all odds, the global shift to renewables continued apace last year, and this trend shows no signs of slowing. Given all the growth ahead, we believe that renewable energy offers the potential for market-beating returns in the months and years to come, and we expect to see no shortage of interest from investors looking for stable, predictable investments that align with their ESG-related goals.

In recent years, renewable energy has undergone a dramatic decrease in cost and is now more competitive than fossil fuels in many markets. In 2021, we believe that this decline, combined with sweeping policy changes across the globe and a renewed corporate focus on sustainability in the wake of the Covid-19 pandemic, will lead to a massive global growth opportunity in renewable energy. Here’s why.

THE US RETURNS TO PARIS

One of the immediate priorities for the newly inaugurated Biden-Harris administration is swift action on climate change. On his first day in office, President Joe Biden signed a sweeping executive order to rejoin the Paris Agreement, as part of a plan for the US to hit zero emissions by 2050. The agreement, which the former administration officially withdrew from in 2020, aims to limit global warming to 1.5 degrees Celsius compared to pre-industrial levels by reducing carbon dioxide and other greenhouse gas emissions through the year 2050. 

According to a recent note by Jahnavi Nadipi, a Platts Analytics North American power markets analyst, the US will need as much as 238GW more solar and wind power to meet the agreement’s targets – more than double its current installed capacity. To meet this, President Biden has put in place an ambitious investment target of $2 trillion in clean energy infrastructure over the next four years, boosting the near-term outlook for the renewables sector.

CHINA PLANS TO DOUBLE GLOBAL RENEWABLES CAPACITY

At the end of 2020, Chinese President Xi Jinping set out concrete plans to achieve net-zero carbon dioxide emissions for the first time. The country plans to achieve 1.2 TW of renewables capacity by 2030 – an amount equal to the current global total installed solar and wind capacity. The China Photovoltaic Industry Association (CPIA), the country’s main solar industry group, says it expects to see 70-90GW of new solar added each year up to 2025.

THE WORLD AIMS FOR NET ZERO

Beyond the world’s two largest economies, a wave of commitments from other Paris Agreement signatories, including Canada, India, the European Union, Japan, South Africa, and South Korea, have put the Agreement’s 1.5°C goals within striking distance for the first time, according to the Climate Action Tracker (CAT). In a clear signal to financiers, investors, manufacturers, and project developers, governments are now seeking a faster expansion of renewable power sources in order to meet these tighter targets.

AUCTIONS UNDERWAY IN LATIN AMERICA

The recent pace of clean energy growth in Latin America shows no sign of abating. The Colombian government will offer 5,000 MW of capacity in its third renewable energy auction in the first quarter of this year, taking it from less than 50 MW of installed renewables in 2018 to more than 2.8GW by the end of 2022. Meanwhile, in May, Chile will launch an auction for 2.31 TWh of renewables and storage.

RENEWABLE DEALMAKING PICKS UP

The increased political impetus to meet ambitious climate targets hasn’t passed energy companies and utilities by, and many spent 2020 shifting their focus to sustainability-focused business. In Latin America, Atlas Renewable Energy signed a total of 660MW in corporate PPAs – a record figure, making us the top developer in the region by contracted volume for 2020, according to Bloomberg. 

In March, we signed the largest-ever solar energy purchase and sale contract in Brazil with mining conglomerate Anglo American, helping it achieve its strategy to use 100% renewable energy for its operations in Brazil as of 2022. In June, we signed a 15-year agreement with material science giant Dow to provide it with clean energy from our 187MWp Jacaranda solar project, located in the municipality of Juazeiro in Bahia State, Brazil. The plant will generate 440GWh per year, which is enough to supply power to a city of over 750,000 inhabitants, enabling Dow to get closer to its renewable energy sourcing goals. 

This is a global trend. In the US, Dominion Energy and Duke Energy shelved their joint Atlantic Coast Pipeline project, while Dominion has sold its gas transmission and storage business and announced a series of additions to its solar portfolio. Meanwhile, French oil major Total’s energy transition strategy continues apace, with the acquisition of a 20% stake in India’s Adani Green Energy, the world’s biggest solar developer. 

INVESTORS FLOCK TO CLEAN ENERGY

2020 saw global stock markets roiled by the Covid-19 pandemic, but the clean energy industry held firm, with the S&P Global Clean Energy Index notching up an impressive 135.4% increase over the year. According to the International Energy Agency (IEA), shares in renewable equipment makers and project developers outperformed most major stock market indices over 2020, while the value of shares in solar firms has more than doubled since December 2019. With Goldman Sachs announcing its expectation that renewable power will become the largest area of expenditure in the energy sector in 2021, surpassing upstream oil and gas for the first time, we expect this trend to accelerate, as major investors seek to capitalize on the upswing in demand.

LARGE ENERGY USERS GO GREEN

Commitments by major corporates to reduce their emissions have trickled in over recent years, but 2020 saw market leaders convert promises into action – driving up demand for further renewable capacity. In May 2020, 155 companies — with a combined market capitalization of over $2.4 trillion —signed a statement urging governments around the world to align their COVID-19 economic aid and recovery efforts with current climate science. In July, Microsoft along with AP Moeller-Maersk, Danone, Mercedes-Benz, Natura & Co., Nike, Starbucks, Unilever, and Wipro created the Transform to Net Zero initiative, with the tech firm committing to develop a portfolio of 500 megawatts of solar energy projects in under-resourced communities in the US. Meanwhile, Google pledged in September to achieve 100% renewable energy by 2030, while Apple’s newly-launched Supplier Clean Energy Program has seen 71 manufacturing partners in 17 countries commit to 100% renewable energy for the tech giant’s production as it commits to transitioning the electricity used across its entire manufacturing supply chain to clean sources by 2030.

RECORD INCREASES IN PROJECTS COMING ONLINE

During the height of the pandemic, when overall power demand sank, renewable power’s share of the grid surged, and this trend is set to continue. According to the IEA, almost 90% of new electricity generation in 2020 was renewable, with just 10% powered by gas and coal, putting green electricity on track to become the largest power source by 2025, displacing coal. In the US, the Energy Information Administration’s (EIA) latest inventory of electricity generators, developers, and power plant owners shows 39.7 GW of new electricity generating capacity will start commercial operation in 2021, with solar accounting for the largest share of new capacity at 39%, followed by wind at 31%.

COVID RECOVERY MONEY HEADS TO RENEWABLES

Despite the pandemic and consequent global recession, decarbonization plans continued through 2020, demonstrating the acceptance of the need for climate action no matter the economic backdrop. With Covid-19 stimulus money now on the table, the International Finance Corporation (IFC) says that supporting low carbon investment and renewables generation capacity could generate a US$10.2tn investment opportunity, create 213 million jobs, and reduce greenhouse gas emissions by 4bn tons by 2030.

FUELING THE NEW NORMAL – NO GOING BACK

Taken together, all of these trends indicate a strong 2021 – and beyond – for the renewables sector. As the global economy charts, a path toward a new normal, clean energy can power a green recovery that leaves no-one behind. And with increased demand, a favorable regulatory framework, and rising investor appetite for green projects, we believe that the outlook for the industry is brighter than ever before.

Across Latin America, companies have woken to the need for embedding sustainability into what they do. But, as the climate change clock keeps ticking, we’re seeing business leaders start to ask how to tackle this issue on a larger and more impactful scale, and we believe that this conversation is one that’s worth having.

The latest World Economic Outlook, published in October by the International Monetary Fund (IMF), shows that we’re at a pivotal moment in history. At the current rate, global temperatures will increase “well above the safe levels agreed to in The Paris Agreement, raising the risk of catastrophic damage for the planet”, it remarks and adds that the window for attaining net-zero emissions by 2050 is rapidly closing. The time for action is now.

Companies make and ship almost everything we buy, use, and throw away, and therefore play an outsized role in global emissions. In recent years, we’ve seen businesses around our region start to look seriously at sustainability, and the buy-in from employees and consumers alike has been encouraging.

However, we believe that unless companies make a decisive shift to tackling the key CO2 emissions elements in their business, the majority of their efforts will not make enough of a difference.

SUSTAINABLE PRACTICES BEYOND THE OFFICE

In recent years, we’ve seen how going green has become an integral part of day-to-day office life, as companies around the region have put in place policies from installing energy-saving light bulbs in buildings to promoting the use of alternatives to single-use plastic. The paperless office idea has taken root, and recycling containers are now in most professional workplaces. Meanwhile, a growing number of firms are pushing the use of sustainable building materials, such as recycled furniture and carpets made from recycled materials, in their offices. We’re also seeing companies start to demand greener manufacturing practices from their suppliers, too, while others have started to promote the safe disposal of the products they make.

These steps are obviously positive. Companies adopt green practices create positive brand associations among consumers and boost the morale of employees who believe in what their company is doing. But do they make a real difference?

LATIN AMERICAN COMPANIES WANT TO DO BETTER

Each year, the S&P Global Corporate Sustainability Assessment assesses sustainability practices across 124 actively participating companies from Latin America. For the third consecutive year, businesses in the region have increased their participation in the CSA, from 38% of those invited in 2018 to 46% in 2019, which proves a growing number are willing to address and improve their sustainability performance. In fact, the participation rate for Latin America is above the global participation rate, demonstrating that there’s a real trend underway for companies to do better.

The progress they’re making, however, is slow. The S&P assessment looks at a number of sustainability dimensions, but on the environment and climate strategy, Latin American companies are well below the global average, showing that although they’re actively seeking to cut down on emissions, there’s still more they could be doing.

ENERGY MATTERS

From an emissions standpoint, Latin America is different from many other global regions, as the bulk of its greenhouse gas production is from land use and agriculture, rather than from energy. However, this is set to change quickly, as economic growth and its rising middle class are expected to drive up energy demand to at least 80% higher than present-day levels by 2040, according to the Inter-American Development Bank, leading to total emissions caused by power generation reaching approximately 2 billion metric tons of carbon dioxide equivalent (MTCO2e) per year.

In order to offset that, you would need to switch 76 billion incandescent lamps over to LEDs or recycle 680 million tons of waste. As a result, the small-scale initiatives being carried out in offices in an attempt to go green are just a drop in the ocean.

It’s clear that only by reducing energy emissions are companies going to be able to minimize their carbon footprint, and this is something more and more business leaders are beginning to think seriously about.

MAKING THE GRADE

Since many companies have already done as much as they can to reduce their overall energy usage, switching to renewable energy presents the best and most far-reaching way of cutting emissions without compromising on performance and adding significant cost reductions. While figuring out how to harness the power of renewable energy to achieve emissions reduction goals may seem like a daunting task, the good news is that business leaders don’t need to become experts in energy sourcing in order to do so.

At Atlas Renewable Energy, we’re starting to hear from a growing number of firms who are committed to making a real difference to their carbon footprint. It’s not just the usual suspects in the most-polluting industries, either: companies in every sector across Latin America, from retail and manufacturing to heavy industry and beyond, know they need to do more on sustainability. The region still has a long way to go, but we think the tide is turning, as more business leaders wake up to the need to take real action on corporate sustainability. Is your company ready to take the next step?

At Atlas Renewable Energy, we recently signed a renewable power purchase agreement with the Brazilian subsidiary of the American material science giant Dow. This landmark deal lays the framework for chemical companies across Latin America to meet their environmental objectives while lowering energy costs at the same time. In this article, we take a closer look at what makes this project so innovative.

Like most industrial companies, Dow has long sought to reduce the environmental and cost implications of its energy-intensive activities. Its leading position as a supplier of chemicals, plastics, synthetic fibers, and agricultural products also means it’s one of the world’s largest industrial energy consumers.

In the past, Dow utilized grid power and fossil fuels to power its plants, but as renewable energy has become more competitive and available in recent years, it has started to rethink its energy portfolio, setting itself a hard target to meet 750 MW of its power demand with renewables by 2025, and achieve carbon neutrality by 2050.

To help achieve this ambitious goal, the company has partnered with Atlas to provide clean energy to its Aratu complex in Brazil, the largest Dow manufacturing facility in the country.

This groundbreaking agreement not only avoids approximately 35,000 metric tons of CO2 emissions per year – the equivalent of taking around 36,800 cars off of the streets of São Paulo – but it lays the foundation for the rest of the Latin American chemicals industry to harness the benefits of renewable energy to achieve climate change mitigation goals while locking in stable energy prices for the long term.

CREATING EFFICIENCIES

Under the 15-year power purchase agreement, we will provide Dow with clean energy from our 187MWp Jacaranda solar project, located in the municipality of Juazeiro in Bahia State. The plant will generate 440GWh per year, which is enough to supply power to a city of over 750,000 inhabitants, enabling Dow to get closer to its renewable energy sourcing goals.

One of the key issues with solar power is intermittency – the sun doesn’t shine 24 hours a day. Because Dow needs all-day power, Atlas will swap energy from Jacaranda with other renewable energy providers to guarantee a full-cycle supply. Essentially, by packaging up our solar power with additional renewable sources that are available on the market, we’ve made it possible for Dow to meet all of its energy needs with renewables – not just its daytime needs. This is the first time that this has been done in Brazil and opens opportunities for companies who may have been dissuaded from using renewables because of their electricity demand profile.

As a large energy user, electricity accounts for a huge proportion of Dow’s fixed costs, and even the tiniest increase can have an enormous impact on its bottom line. To tackle this, Atlas built in a series of efficiency-boosting measures.

The first is the bifacial modules used in the plant, which can deliver a power generation gain of up to 9% over equivalent mono facial panels, cutting down on land use for the same amount of electricity. Second, the project is being connected to Atlas’ digital substation, which enhances controllability and reliability while optimizing costs. But the efficiency doesn’t stop there: we also implemented a unique US dollar financing structure that created a natural currency hedge.

SPEAKING THE SAME LANGUAGE

In selecting a partner to help it achieve its aims, Dow was looking for a like-minded company with similar values. That’s why, aside from clean energy and favorable pricing as part of the Atlas Green Finance Framework – our commitment to developing projects that protect and preserve the environment – we also incorporated our signature social engagement. At the Jacaranda plant, we are offering opportunities to the local community that promote diversity and inclusion within the construction’s hiring process. To do this – and to get this right – we have brought in NGOs and local authorities to help us provide training in specialized fields to local women, and we’re incentivizing our local contractors to prioritize people from minority backgrounds in their hiring processes.

A TRUSTED AND CAPABLE PARTNER

Achieving all of this during the turbulence and upheaval that 2020 has brought to the world was no mean feat. We’ve worked hard to ensure the health and safety of workers on our sites because we know how important renewable energy is to the recovery of Latin America’s economy post-Covid19. As a result, our operational capabilities, our execution, and our closing speed have remained optimal.

We’ve been able to do all of this because we’re not new to this. We already have four projects operating in Brazil and several more across the region. All of them have been delivered on time and on budget, and this has boosted our reputation among lenders and partners alike. Because of this, in spite of the tough economic and financial backdrop, we’re in the privileged position of being able to negotiate favorable funding conditions – which translates to cost savings that we can pass on to our customers.

THE BEGINNING OF A TREND

In Latin America, renewable energy is already as affordable as – if not cheaper than – traditional sources. This Corporate Power Purchase Agreement, which leverages financial, operational, and technological innovation, makes it possible for large energy consumers in the chemical industry and beyond to make a huge step towards achieving their carbon emission reduction goals while gaining real visibility over their long-term energy costs.

We’re seeing an increasing number of inquiries from these kinds of companies, and we continue to find competitive solutions for them. The mining industry has already got on board – from the Atlas’ Casablanca plant, which will supply clean energy to mining giant Anglo American in Brazil, to our Javiera plant in Chile, which already powers a copper mine. Our agreement with Dow shows just how much we can achieve when two leaders in their respective fields get together. We believe it paves the way now for the chemical industry to join the green energy revolution – all around the region.

In recent years, we’ve seen the beginnings of a far-reaching sustainability transition among corporations in Latin America that is slowly beginning to move the needle on creating fairer, more inclusive economies for all.

As a region, Latin America bears an outsized brunt of climate change, with extreme weather phenomena from hurricanes in the Caribbean to El Niño on the Pacific coast, as well as rising sea levels and poor air quality, all of which make environmental considerations all the more important.

But it is also a region where enormous progress can be made in other sustainability metrics, such as improving rural livelihoods, contributing to increased gender equality, and boosting the participation of indigenous and minority populations in the economy.

In recent years, we have seen a growing number of companies across Latin America start to focus on these issues. International Environmental, Social and Governance (ESG) best practices are being integrated into the region’s corporations, and it’s happening across all industries. The IndexAmericas[1], created by the Inter-American Development Bank (IDB), highlights the top 100 sustainable firms operating in Latin America and the Caribbean, measured against environmental, social, and corporate governance criteria, as well as on their performance in areas such as gender equality and diversity.

The index has largely been made up of foreign multinationals since its inception, but in the last three years, the number of Latin American firms has increased by almost 30%, demonstrating just how much the issue of corporate sustainability is gaining force in the region.

Another example of this growing trend can be found in the Dow Jones Sustainability MILA Pacific Alliance Index. It measures best-in-class companies across Chile, Colombia, Mexico and Peru that fulfill certain sustainability targets better than the majority of their peers within their respective industries. When it was first set up in 2017, only 42[2] companies met its criteria. Today, that number has grown to 116[3].

Sustainability is also becoming a major focus for the region’s investors, who according to a recent study by Natixis[4] display higher demand for ESG than any other region in the world, as they believe that it can help them enhance risk adjusted returns as well as help them align their assets with organizational values.

When we speak to our partners around the region, what we hear is that incorporating ESG into business models is not a fad. Companies and investors alike are seeking to achieve the triple bottom line of social, environmental and financial success, and the trend is picking up steam.

GREEN ALONE IS NOT ENOUGH

Switching to renewable power, especially in a region as abundant in solar and wind energy as Latin America, is one possibility for companies seeking to reduce their environmental footprint.

Thanks in large part to the government‑led efforts to increase the use of renewables, the region is making solid progress towards its commitments under the Paris Agreement.

But simply “going green” doesn’t equate to sustainability. Sustainability is determined by three different parameters: environmental, social and financial, and if a corporation only switches to renewable energy without addressing the wider implications, they are missing an opportunity.

Latin American corporations today want to be assured of a long-term solution that not only guarantees the availability of clean electricity without hampering the access of others to resources as well as acting as a force for good in society. As a result, an increasing number of companies across the region are not only starting to explore the possibilities of renewable power purchase agreements, but are also beginning to question where the finance for those projects comes from, how the workforce on those projects is structured, and how the developer operates within local communities.

THE ATLAS APPROACH

In our experience, we have discovered that there are no truly quick wins in sustainability. That’s why Atlas has, since the very beginning, dedicated large amounts of resources to ESG, because we believe that real sustainability comes from making strategic investments for the long term.

A major focus for us is social sustainability. When working with local communities, we focus on promoting local welfare increase. In our view, building relationships with the local community doesn’t just mean handing out footballs or school uniforms; it means being cognizant of the fact that the asset will be part of the community for 30 years, and that, if managed correctly, it can represent an opportunity for job creation and income generation. We take on board all of the implications around generating power, and we take comfort in knowing that our presence boosts the local economy wherever we are.

As an example, in June 2020, Atlas Renewable Energy and Dow signed a large-scale solar energy contract in Brazil. The amount of energy generated will cover the equivalent of the power needs of a city of over 750,000 inhabitants, and will result in the avoidance of around 35,000 metric tons of CO2 emissions per year. In addition, the project includes a commitment to gender inclusion and rural employment generation, with training provided for the local female workforce to enable them to access the better-paid job opportunities presented by the project. During the construction of this project, we expect to hire three to four times more women than are usually employed in these developments, with 70% of the total workforce expected to be from the local area.

Meanwhile, at our Guajiro solar plant in Mexico, we have partnered with The Pale Blue Dot, a Mexican organization that promotes educational programs through the use of technology in schools and community centers, to provide more than 400 students from the local community with internet access and digital classrooms.

Financial sustainability is also a key contributing factor to how we do business. We work with impact investment partners such as the World Bank Group’s Clean Technologies Fund and the Inter-American Development Bank’s IDB Invest, and seek wherever possible to tap in to favorable interest rates by linking our funding to our environmental and social performance.

Being sustainable also represents risk mitigation, all the way through the project, from ensuring the transparency of the supply chain of components to achieving bankable projects that have gained the support of the communities in which we operate. This ensures that we can assist our corporate partners in getting their sustainability objectives over the line by providing them with the environmental, social and financial benefits they need in order to meet their obligations.


[1]https://indexamericas.iadb.org/en/Aboutus
[2]http://worldofficeforum.com/wp-content/uploads/2017/11/dow-jones-sustainability-index-mila-constituents.pdf
[3]https://www.spglobal.com/spdji/en/idsenhancedfactsheet/file.pdf?calcFrequency=M&force_download=true&hostIdentifier=48190c8c-42c4-46af-8d1a-0cd5db894797&indexId=91920628
[4]https://www.spglobal.com/spdji/en/idsenhancedfactsheet/file.pdf?calcFrequency=M&force_download=true&hostIdentifier=48190c8c-42c4-46af-8d1a-0cd5db894797&indexId=91920628

Creating a successful solar energy development isn’t about simply producing power from the sun. It’s a careful balance to ensure the most optimal Leveled cost of energy (LCOE) over the life of the project, the best value proposition, and ideal financing conditions. And to get that balance right means that solar energy producers must be at the cutting edge of innovation, in all aspects. 

As the industry continues to push new limits each year, there are four ways of addressing innovation in the solar space. Continuous innovation in each area is the only way that solar providers can ensure that they can deliver what investors and companies alike need.

Technological Innovation

The first, and probably most obvious, aspect of innovation in solar is technology. One of the most exciting developments in recent years has been the rapid market adoption of bifacial solar modules, which produce solar power efficiently from both sides. But, when choosing which module is the best option, we don’t believe it’s enough for solar energy providers simply to add in the latest technology and hope for the best. There’s no doubt bifacial modules can increase power production, but accurately predicting the increased output for a system design that covers the additional costs means bringing research and development in-house, rather than simply relying on the vendor or third-party estimates.

At Atlas, we know from long experience that real-world behavior often introduces a slew of new variables to take into account. So, before introducing bifacial modules, we set up our very own laboratory in a utility-scale plant and tested different technologies over one year. This gave us confidence in our modules, and in the actual amount of energy they can produce in a given scenario. The same goes for trackers and inverters. By testing the technology, we can best calculate how to achieve improvements in efficiency across multiple variables – which we wouldn’t be able to do if we just relied on base-case figures available in the market, especially for new technologies that are not yet mainstream.

Digital Transformation

The world of big data is upon us. In the solar space, we have seen huge advances in how digitally enabled technology can drive improvements, from drones for asset inspections to machine learning for monitoring operational plants, and mapping using satellite data.

As we’ve seen in other industries, being able to harness the full potential of what digitalization can offer creates an enormous competitive advantage, and Atlas has made innovation in this area a key priority.

One example of this can be found at our Juazeiro Solar Plant in Brazil. Large renewable energy projects typically involve the addition of a substation, which requires land as well as construction time. By installing the region’s first-ever digital substation, we broke technological boundaries, as well as increasing productivity, safety, and reliability. Compared to a conventional substation, our digital substation requires substantially less space, reduces the quantity of copper wire needed, and facilitates the more efficient operation of utility networks including monitoring, diagnostics, and control[1].

Operational Innovation

The cost of solar power has consistently decreased over time, as newer and better technology makes producing energy less expensive. However, getting the absolute best out of that technology to improve reliability – which at the end of the day is what everyone is looking for – means solar producers must seek to constantly improve their value proposition.

Only being able to offer electricity while the sun is shining will not suit all of the clients’ needs, so a strong partner will bring together a range of solutions, from batteries or other storage technology to intelligent grids that enable energy savings, or even allow clients to disconnect from the grid as and when they need to.

By harnessing operational tools, from sensors to artificial intelligence, Atlas continuously seeks out marginal improvements, mitigating risks to its clients and passing on savings and improvements on availability.

Our final goal is to get solar energy to our clients in the best and the most efficient way possible, which means focusing every day on better ways to do things, from our operational systems to our plant construction methods.

Financial and Contractual Innovation

Innovation on the actual nuts and bolts of producing and delivering solar power is one thing, but we believe that a truly innovative partner needs to go even further.

The financing strategy of a solar producer is a major factor in shaping the way they can conduct business and what constraints it has in terms of what it can provide. The majority of solar projects use traditional project finance, which encumbers the asset in favor of the lenders in a one-to-one linkage. While this works perfectly well in most cases, it does mean that there is little flexibility, which means that combining different plants and different off-takers with different power purchase agreements (PPAs), or having the optionality of adding in additional debt tranches and projects, isn’t feasible.

Solar producers who can think outside of the box around financing can lower costs even further, mitigate risks, and pass on these efficiency gains to their clients.

At Atlas, we continually seek out ways to structure our PPA contracts more flexibly while still complying with our risk parameters. By working on better, more sophisticated risk mitigation practices, we can move even closer to our clients, creating contracts that better suit their needs while ensuring a solid, bankable PPA. 

Why does having an innovative partner matter?

Innovation has become a competitive necessity for companies around the world. Recent research carried out by PwC showed that, over the last three years, companies that innovate have grown 16% faster than those who don’t, with that gap only set to widen.

In the solar space, with contract lengths of as much as 25 years, choosing a solid, profitable, and growing partner are fundamental to a successful project. The most reliable companies in this industry are the ones that keep improving, as they are the only ones who can provide confidence that they will achieve the objectives set out in a solar PPA.

SOURCES


[1] Source: energyglobal.com

https://www.energyglobal.com/solar/22082019/atlas-renewable-energy-announces-new-solar-plant-in-brazil/

Latin America’s renewable energy sector is heading towards 239 gigawatts of installed wind and solar power capacity by 2040, underpinning the tremendous investment potential in the sector. In this article, we take a look at the main opportunities for the private renewable energy market in the region, as well as addressing some of the uncertainties.

Around the world, support for old polluting industries has waned, while clean, green energy has risen in popularity. Fossil fuels are in steady decline, with the traditional energy sector consistently underperforming the S&P 500, and recent research shows that 77% of investments in new power generation to 2050 will be in renewables.

Latin America, home to some of the world’s most plentiful wind and solar resources, is set to play a vital role in this energy transition, and we see a number of trends that point to now being the right time to invest in the sector.

Economic factors  

Unlike the more consolidated economies of the US and Europe where the conventional electricity consumer market is either stagnant or shrinking, Latin America’s middle class has been expanding over the past decade, both in absolute terms and as a share of total households, fueling domestic energy needs. The region’s demand for electricity is increasing consistently year-on-year: Social mobility enables the population to buy appliances and lead more modern lives with greater energy consumption, while in many countries the energy-intensive industries that form a core part of the business community continue to expand operations.

We believe this demand will be best met by renewables, firstly because of cost: unlike in other regions, renewable energy is competitive against new thermal generation in Latin America, even without subsidies. There is little doubt that massive cost reductions in the last decade are one of the main reasons behind renewables rapidly transforming the region’s electricity mix.

But it’s not only future energy demand that we see being addressed by renewables. In many markets, the cost competitiveness of renewable energy can undercut existing thermal assets. This opens up the opportunity of capacity replacement by renewables – something we’re already seeing in Chile, which has implemented a decarbonization roadmap, to be completed by 2040. Other countries are likely to follow suit; it’s only a matter of time.

The make-up of Latin America’s economies is also an important factor. As major exporters of the commodities that power the growth of the rest of the world, the region’s fortunes are driven in large part by international oil and mining companies and their clients – all of which are seeing increased pressure to reduce their carbon footprint and demonstrate progress in sustainability. As a result, renewable energy procurement has become an increasingly important part of their corporate strategy.

Moreover, it isn’t just the commodity exporters. We’re seeing multinational companies with a strong presence in Latin America, from the tech sector with its data centers to consumer goods brands, to chemicals conglomerates, manufacturing companies, car companies, and even large retailers, change their approach to energy consumption in the face of shareholder and consumer pressure to go green.

Projects moving forward

Like any outlook, however, there are some uncertainties.

The role of government remains instrumental to renewable energy deployment, and certain developments, such as the postponements of electricity auctions in Brazil and Chile, or recent regulatory roadblocks in Mexico that limit the operation of new renewables plants, have demonstrated the importance of strong on-the-ground knowledge when considering participating in the market.

Meanwhile, the Covid-19 pandemic has seriously dented global economic growth, and Latin America is no exception. The timing and pace of the recovery remain unpredictable, however, we believe that the pandemic has the potential to change the priority of government policies, and renewable energy will play a key role in Latin America’s rebound from the crisis.

Despite these global challenges, renewable energy projects are still going ahead. On a global level, looking at the project pipeline through 2025, almost one-third of wind and solar PV projects are already contracted and/or financed, according to the International Energy Agency’s latest renewable energy market update[1].

There’s another trend that we’re starting to see in the region which adds strength to our conviction of a renewables-led economic recovery. As the pandemic accelerates the focus on sustainability from policymakers and investors, we have seen an increase in the take-up of private-sector reporting on exposure to climate-based financial risks. One example is in Chile, where institutional investors and the Santiago Stock Exchange have started to implement the principles laid out by the Task Force on Climate-related Financial Disclosures (TCFD), an initiative started in 2015 by the Financial Stability Board. We think this will lead to an even greater number of funds investing in green projects, such as wind and solar power, further driving the growth of the sector.

A flight to safety

With projections for a deep and long-lasting global recession as a result of pandemic-related lockdown measures, investing in clean energy is increasingly viewed not just as a way to reduce pollution, but as a means to hedge against future risks and stranded assets.

For investors, renewable energy is much akin to real estate investment: the largest cost is the initial equipment, but once the project is completed, it represents a stable asset with few moving parts, low operating costs and very long term revenue streams that can be paired with pension and insurance obligation maturities.

If the project is developed with a power purchase agreement (PPA), the stable nature of the benefits is even more evident. These structures secure electricity revenues for a significant part of the project life, and can be likened to owning a building with a 15-year lease already signed, guaranteeing income for years to come. Meanwhile, renewable energy demand is expected to continue to surge – especially in Latin America, where electricity consumption is projected to rise more than 70% by 2030, according to the Global Wind Energy Council.[3]  

This capacity is unlikely to be made up by fossil fuels, particularly as growing concerns over carbon emissions and climate change put project approvals in doubt. As a result, we expect to see a flight to quality by investors seeking low-risk, long-term revenue streams, with increased allocations going to renewable energy infrastructure.

A maturing market

Latin America’s advantages when it comes to attracting investment into renewables hasn’t gone unnoticed. In recent years, we’ve seen the confidence of international developers and international lenders alike translate into projects across the continent.

These players were first movers, and they have since been followed by large utility companies, which have begun to switch their investment focus to renewables after conventional energy began to lose market share.

Now, as corporations start to take up PPAs in their droves, the market has become increasingly dynamic, particularly in Brazil, Chile, and Mexico. There’s still a lot of room for growth in other markets, such as Colombia, and even in the more consolidated markets, we are seeing further opportunities as new technologies are being deployed, from storage solutions to bifacial modules in photovoltaic plants.

We believe that the market is still early in its growth curve, presenting multiple opportunities for investment, and various studies back that up. According to the International Renewable Energy Agency (IRENA), by 2050, Latin America will see an additional 131GW of installed wind capacity and 172GW of new solar capacity.

At Atlas Renewable Energy, our experienced team is at the forefront of developing and operating clean energy projects in Latin America. We have provided investors with stable, strong returns in Brazil, Uruguay, Chile, and beyond, and we know first-hand the strength of the region’s renewable energy market. Throughout the region, as we’ve outlined here, there are several trends that we think make renewable energy a compelling investment play. We believe that with the right partners and carefully chosen projects, investors, financiers and corporations alike can reap the benefits of the Latin American renewable sector for many years to come – and the time to do so is now.

SOURCES COMPILATION

https://www.gartner.com/smarterwithgartner/9-future-of-work-trends-post-covid-19/
https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_GRO_R06_LAC.pdf?la=en&hash=1493165ED11340CC1F2681321F8D24754F0292C6
https://gwec.net/gwec-and-olade-team-up-to-drive-the-energy-transition-in-latin-america/
https://www.fsb-tcfd.org/supportive-quotes/
https://www.iea.org/reports/renewable-energy-market-update/challenges-and-opportunities-beyond-2021


There is no doubt that the first half of 2020 didn’t play out quite as planned. However, while the current global economic situation has stressed industries to unimaginable extents, today’s low energy price scenario provides large corporate energy users with an unprecedented opportunity to lock in reduced costs, shore up their business model, and hedge against future uncertainty. Here’s why.

Gaining control over costs

The financial impact of the Covid-19 crisis on Latin America’s companies has been widespread. In aggregate, Latin American stocks fell by 35%[1] in the first six months of this year, compared with a loss of 10.4%[2] for the emerging markets as a whole.

With so much uncertainty still ahead, long-term scenario planning is all but impossible. But gaining control over energy costs can be a means to free up working capital, strengthen the balance sheet, and gain long-term visibility.

This is the first time in recent history that the energy price environment is so favorable, and no-one can predict how long this will last. And in most markets in Latin America, renewable energy is competitive with conventional sources, or in many cases even less expensive. Large energy users today have an unprecedented opportunity to negotiate the best long-term deal, and they cannot afford to miss this chance.

Why renewables?

Recently, we have seen the speed and scale of what can be achieved by social justice movements around the world, as consumers vote with their wallets to reward responsible actors. Environmental activism is no different. Companies that recognize this and transform their business models away from polluting power sources are ensuring a successful future, responding to their consumers and readapting their strategy, sourcing, and logistics to the world of tomorrow.

We’re already seeing a growing trend by financial markets to move towards companies with solid climate policies in place, making capital scarcer and more expensive for those who don’t. In January this year, BlackRock, the world’s largest money manager, said it will exit investments with high environmental risks, and we believe this is just the beginning.

With both Fitch and S&P Global Ratings reporting that credit conditions in Latin America are worsening amid the Covid-19 outbreak, energy-intensive industries across the region are seeking to shore up their power requirements to weather the storm in the financial markets. One way of doing this is by bringing power purchasing decisions in-house in order to control the attributes of the product and services they’re buying.

In effect, having a sound energy strategy has become as important to many companies as having a sound financial strategy. Consumers and shareholders alike now want to see proof of a companies’ green credentials, whether it shows that their renewable energy sources have substituted a traditional source, or that their energy comes from a producer with a sound community relationship and social program strategy. All of these factors can be meaningfully controlled if the purchase is brought in-house.

Partnering for good

The good news is that large energy users don’t need to build their own renewable energy generation plants in order to access all of these benefits. Through the power purchase agreement (PPA) structure, corporate energy consumers across the region can take advantage of better strategic energy sourcing decisions with the assistance of a knowledgeable partner. This is the perfect opportunity to reduce risks – be that backlash from clients and financial markets related to power sourcing, or the execution risk of the projects that are needed to supply them with power.

Renewable energy projects are fast and relatively simple to execute and have modularity to them that allow them to easily adapt to the corporate energy purchaser’s size. What’s more, they can be leveraged by the corporate purchaser to demonstrate their sustainability commitments, providing a visible signal to customers and investors alike that they are on the right side of the climate equation.

Energy-intensive industries: the backbone of the Latin American economy

In resource-rich Latin America, the energy-intensive extractive and chemical industries make up a large portion of the economy and export basket. 

But it isn’t only the large miners and chemical producers who can take advantage of the current situation. The region is home to a wide range of big energy users, from agribusiness to the pharmaceutical and healthcare industry, mining processing, water desalination, the technology sector, and even retailers. International companies operating in Chile, Peru, Brazil, and Mexico have been early movers in this respect – from Anglo American to multinational company Dow.

A window of opportunity has opened to transition from conventional energy sourcing to renewables. It is hard to know how long this downturn will last, how soon the recovery will be, and more importantly, what other black swan events may push energy costs in the opposite direction.

If these last months have taught us anything, it is that factoring in extreme events needs to be a part of risk models going forward. We believe bilateral power purchase agreements for renewable energy are a vital tool in building resilient energy-intensive businesses for the new normal, post-pandemic. Not only do they offer long-term price agreements at attractive rates, but allow companies to align themselves with customer expectations.

SOURCES COMPILATION

https://www.iea.org/reports/renewable-energy-market-update/challenges-and-opportunities-beyond-2021
https://www.gartner.com/smarterwithgartner/9-future-of-work-trends-post-covid-19/
https://gwec.net/gwec-and-olade-team-up-to-drive-the-energy-transition-in-latin-america/
https://www.fsb-tcfd.org/supportive-quotes/

[1] Source: Reuters MSCI https://www.reuters.com/article/emerging-markets-latam/emerging-markets-latam-fx-stocks-fall-on-spike-in-virus-cases-dour-growth-forecast-idUSL1N2E11WA
[2] Source: Hargreaves Lansdown https://www.hl.co.uk/news/articles/how-are-stock-markets-in-latin-america-coping-with-coronavirus-turbulence

Compared to other infrastructure sectors in Latin America during the Covid-19 pandemic, renewable energy project execution has demonstrated remarkable resilience. After overcoming supply shocks from the beginning of the year as factories briefly halted operations, construction activity on solar and wind projects – deemed as an essential activity in many jurisdictions – has been largely undisrupted by work stoppages that have affected other industries.

As we have adapted to the new normal, we have worked hard to bring together world-class best practices to ensure workers’ health and safety. In this article, we share what we’ve learned and how Covid-19 has demonstrated, once more, the strength of the renewable energy sector, even during a global health crisis.

Learning from others’ experience

This is a new situation for everyone, but this doesn’t mean we need to reinvent the wheel. At Atlas, we have strong relationships that span the globe. From our suppliers in China to our contractors who bring experience from Europe, we’ve been able to capture findings from the geographies that have already gone through the worst of the pandemic and take their protocols as a starting point when exploring ways to implement world-class safety standards in Latin America.

Keeping workers safe

By their very nature, renewable energy project sites lend themselves well to social distancing. Wind turbines need to be spaced hundreds of yards apart in vast, open spaces, and even the smallest of our solar farms are measured in the hundreds of acres. This inherent reality helps us to mitigate on-site risks right off the bat.

But simply relying on natural distance isn’t enough. To keep our workers safe, we have pinpointed the many risk factors throughout their day – even before they arrive on-site – and put in place measures to mitigate them.

We’ve adapted the transportation methods our workers and contractors use to ensure adequate distancing between people and put in place daily deep cleaning of the vehicles to ensure optimal sanitization. Once workers arrive onsite, we hold daily safety meetings where we devote time to discuss Covid-19, making sure everyone is aware of the protocols that are in place and giving people the opportunity to raise any concerns about their health. We’re also checking for coronavirus symptoms, which includes temperature measurements and questionnaires to identify any workers who have been in contact with friends or family members who may have been exposed to the virus.

Because we have seen from other countries that many people who are infected with the virus are asymptomatic, we’re taking an extremely conservative approach to personal safety. We’ve revised our entire modus operandi all the way down the value chain, cutting out unnecessary face-to-face meetings with service providers. On-site, we are sanitizing all common areas and providing personal protective equipment to every worker, including masks and gloves. Following examples set elsewhere in the world, we are also exploring the possibility of providing remote virus testing, which will provide an additional layer of safety to our workforce.

Our sites have always been technologically advanced, but in these strange times we are taking this a step further. One example is our virtual safety walks, where our supervisors can now check-in – at a distance – on workers’ performance as well as adherence to safety standards via video technology. Additionally, we’ve also put in place cohort segregation, which minimizes interactions among the workforce and enables the quarantining of small groups in case of any reported infections, creating an efficient way of working even during the pandemic.

Combatting mixed messaging

One of the biggest issues faced by international health authorities has been ensuring the global population is adequately informed, and busting myths about the spread, diagnostic, and treatment of Covid-19. This is of enormous importance to us as we seek to achieve alignment among all of our stakeholders on risk identification and mitigation.

On-site medical staff play a key role in communicating the facts about the disease to workers and ensuring they understand that the precautions they take at work also need to be taken outside of work in order to protect their families.

In the local communities, our community liaison officers have produced communication modules using resources from international institutions that go out via social media, radio, and other means to provide people with a trusted source of information in these confusing times.

Working together as an ecosystem

We don’t operate in a vacuum, and throughout these difficult times, we have learned that open channels of communication are key to getting the job done. Renewable energy generation will play a transformational role in the economy post-Covid-19, and it is incumbent upon us to meet our commitments to our projects. Our close ties with local authorities, the communities we operate in, and our contractors have been vital, and there is a common understanding that we need to work closely together as we seek to adapt to this new normal.

We have seen positive reactions from all of our contractors, who have provided suggestions and recommendations based on their experiences in other areas. This drive towards benchmarking and knowledge-sharing has brought about a collaborative means of creating best practices that go above and beyond those required by national legislation, and will only serve to boost resilience across the entire industry.

Local authorities, too, cognizant of the need to safeguard jobs as well as community health, have facilitated knowledge transfer between companies operating in their regions to support the completion of projects which will bring both employment and clean energy to the population. We believe that this new focus on cooperation will remain and will help to bring about better standards and greater efficiency throughout the industry.

Moving along the learning curve

We are living in unprecedented times, and we are still in a period of adaptation. However, our experiences have taught us that for the renewable energy sector at least, the impacts of the Covid-19 pandemic can be successfully managed, to the extent that we don’t foresee any material impact on project execution in the coming months. In this sense, the world can continue to invest in renewable energy opportunities creating hundreds of thousands, if not millions, of much needed jobs.

Renewable energy demand remains high across Latin America, and by putting ourselves at the forefront and setting industry-leading standards to keep people safe from Covid-19, we are ensuring the sustainability of our projects for many years to come.

SOURCES

Atlas Renewable Energy Executives Interview – May, 2020