CPFL Renováveis in the market

Transcription

1 Praia Formosa Wind Farm CPFL Renováveis in the market 16 Annual Report Annual Report 17

2 business model GRI G-3; G-; G-6; G-8 CPFL Renováveis business model CPFL Renováveis operates in the national electricity sector, exploring the brazilian energy market opportunities from renewable sources by the development, construction and operation of a portfolio of small and medium size power plants focused in four sources: small hydro power plants, wind farms, biomass plants and solar power plant. Currently, it is the largest renewable sources energy company in Latin america. With an expansion strategy based on acquisitions and project development in its different stages and renowned investment background, the company adopts a technical and financial assessment that aims to maximize the creation of value for the business. Generation - Operation Resources Generation assets Impacts Generated energy 0 conflicts with local population due to access to the resources Small Hydro Power Project (SHPP) 38 SHPPs with MW of installed capacity, physical guarantee of. MW average Wind Farms 3 wind farms with MW installed capacity, physical guarantee of 3. MW médios 0 families relocated (involuntarily) 0 km flooded or deforested areas 0 h in rehabilitation and or reforestation and/or compensation areas 17 property leasing contracts with local families 1.3 GWh % of the 3.1 GWh 9.8% of the energy ipê thermoelectric,33,306.9 t of sugar cane 7,6 t of woodchips Biomass Generation Plants 8 plants with MW of installed capacity, physical warranty of 13.7 MW average 0.9 GWh 16.% of the total Solar Power Plants GWh 1 plant of 1.1 MW installed capacity, physical guarantee of 0. MW average 0.03% of the total FREE MARKET 1. GWh DEMAND MARKET. GWh TOTAL.7 GWh 18 Annual Report Annual Report 19

3 Wind Farms Operation Biomass Generation Plants Operation Biomass Generation Plants Operation Natural resource: wind The wind makes the wind turbines blades to move 3 This movement activates a generator that transforms it into electricity The generated energy is injected into the transmission network 6 The energy is distributed to the urban center 1 Natural resource: sugarcane bagasse The sugarcane bagasse is put into a boiler 3 The steam under pressure is conducted to the turbine The turbine movement activates the generator that produces energy 6 The generated energy is injected into the transmission network 7 The energy is distributed to the urban center Solar Power Plants Operation Small Hydro Power Plants (SHPP) Operation Natural resource: sun 3 Transmission network 1 Natural resource: water This movement creates an electrical current The sunlight is absorbed by the photovoltaic cells. The energy from the light is transferred to electrons inside the plates, making then move and generating an electric current The energy is distributed to the urban center The water from the reservoir is conducted to the power house 3 Inside the power plant, the turbine blades rotate through the water force The generated energy is injected into the transmission network 6 The energy is distributed to the urban center * Photovoltaic solar energy does not depend on the sun, but on the light that the sun provides. So, it can be produced even on cloudy or rainy days. 0 Annual Report Annual Report 1

4 Plano Alto SHPP Mission GRI G-6 Generating energy from renewable sources, in harmony with environment and society, promoting the maturation of the clean energy market. Vision Energy is essential to the well-being of people and the development of society. We believe that sustainably producing and using energy is vital for the future of humanity. Principles Creation of value Sustainability Safety and life quality Entrepreneurship and innovation Commitment Improvement Trust and respect Agility Strategy and objectives GRI G-13 CPFL Renováveis business strategy is based on Brazil s development perspectives in the medium and long term. The company works, convinced that the evolution of the country s energy demand will follow the economic growth, with a trend to the diversification of its energy matrix. The company also believes that the renewable sources are very well prepared to increase their share in the national electricity, once they have short implementation terms, agility in the obtainment of environmental licenses, attractive return for the entrepreneurs and equipment manufacturers already installed in Brazil for the main sources. Currently, the alternative renewable sources represent approximately 16% of the country s installed matrix and it is expected to reach 7% by 0. This represents an increase of 3 GW, which can only happen with a substantial investment in the sector. CPFL Renováveis pays attention to this scenario and will keep its growth strategy based on a three base column: technical competences - acquired in the business daily routine, management - by the constant training and update courses, and, finally, optimization of the existing assets to make the projects viable. In 01, the company completed the construction of Morro dos Ventos II wind farm, with 9. MW of installed capacity, eight months in advance. The risks related to the development of such projects are mapped and the company aims at mitigating them, having a well-structured management team for this. CPFL Renováveis also constantly evaluates acquisition opportunities, and in 01 it has consolidated its association with Desa 8, signed in 01, by means of which it has incorporated 1 power plants, today already fully integrated to the company s portfolio. With regard to the optimization strategy of the current portfolio, CPFL Renováveis s focus is addressed to the primarization of the services and constant improvement of the corporate structure, investing in the standardization of its controls, systems and processes to manage its 81 plants, both in the operation centers and in the support areas. Furthermore, CPFL Renováveis is focusing its activities in the improvement of equipment availability as well as in perfecting the performance and costs reduction. As a result, the company s energy and its net revenue have grown, respectively, approximately 3% and 0% in the last year, a period in which the operation costs remained stable, in spite of the country s inflation and economic difficulties. Added to these strategies, CPFL Renováveis socio-environmental responsibility actions take into consideration the compliance with the national laws, as well as United Nations Organization (UN) international agreements, which establish sustainability criteria, such as the Global Compact, the objectives of the United Nations Millennium Development Goals and the Entrepreneurs Pact for the Integrity and Convention against Corruption. 8 For further information about DESA, please click on the link: CPFL Renováveis business strategy is based on Brazil s development perspectives Annual Report Annual Report 3

5 Moreover, the company is annually audited by IFC (World Bank) to comply with the Performance Standards, whereas: socio-environmental impacts assessment and management, employment and labor conditions, resources effectiveness and pollution prevention, communities health and safety, acquisition of properties and involuntary resettlement, biodiversity conservation and sustainable management of living natural resources, indigenous peoples and cultural heritage. GRI G-EC8 All of this guided by an Integrated Management Policy 9, which establishes the following commitments: Generate results that enable the return of the invested capital, in a sustainable manner, seeking balance between the economic, social and environmental aspects. Work according to quality criteria concerning product, environmental, occupational health, safety and social responsibility in all the project phases. Stimulate suppliers and partners to adopt socially responsible practices and ensure that the occupational health, labor safety and social responsibility criteria, established by the company, are met in the development of their activities. Foster innovation and the scientific and technological development in the processes and activities. Encourage conservation of natural resources and the pollution prevention, by adopting preventive and socio environmental impacts mitigation actions. Prevent accidents and encourage the improvement of the occupational health of employees by means of a pleasant, safe and healthy work environment. 9 Check the entire policy at: aspx?idcanal=yehbx9znrpe+d+q+olyp+q== Promote transparency in the activities developed among with the communities embraced in the projects, building a confidence relationship between the parties. Conduct business pursuant to the Brazilian legal provisions and other applicable requirements, as well as to the management systems standards adopted, sector rules and respecting the deals and collective labor agreements as well as the international labor protection deals signed by the Brazilian government. Ensure, by means of its integrated management system, the prevention of occurrences related to the child labor, slave, compulsory or forced work in its whole value chain. Value the diversity and the respect for people with special needs. Continuously improve the performance of the Integrated Management System observing the quality, environment, occupational safety and health and social responsibility requirements The decision-making regarding new business is based on a consistent business assessment, including the specific analysis of potential social and environmental impacts of projects. In order to obtain results that allows the return of the invested capital in a sustainable manner and the balance between the economic, social and environmental aspects, CPFL Renováveis has as strategy to link sustainability principles to all the stages of its projects, ensuring the continuity of its activities. Scenario changes Political Economic Technological Regulatory Business Model - Risks Guidelines and Strategic objectives of CPFL Renováveis 1. Operation efficiency. Growth Political uncertainties that can generate a deterioration of the macro-economic scenario and in the country and sector's investments environment. Increase of the interest rate and shortage of credit offer, customers in default (distributors, free market). In the short term, absence of local manufacturers for the most recent technologies resulting in high exchange rate fluctuations exposure/ low competitiveness; emerging of revolutionary technologies for the sector can impact the manner by which the company will grow (such as the reduction of energy storing costs). Increase of the bureaucracy for projects in the country. Removal of the existing incentives for renewable sources. Regulatory instability/ absence of clear rules to rule the market. Business Model - Opportunities Goals and follow-up indicators (qualitative) Global warming combat policies and policies to stimulate renewable energy development in Brazil (such as the substitution of thermal plants by renewable ones). Better conditions for the obtainment of funding with lower interest rates, creating opportunities of management/optimization of the indebtedness and improving the financial return and the competitiveness of the projects. Emerge of new financing instruments for the sector, such as infrastructure debentures and green bonds. Opportunities for companies with robust balance sheets. Nationalization of foreign technologies; additional reduction of costs and increase in solar and wind efficiency. Reduction of the energy storing costs, boosted by the adoption of intermittent sources. Bureaucracy reduction. Less governmental interference in the sector, or better planning with regard to the impacts of new laws. Adoption of new policies to incentive the of renewable energy in the country. High operational performance, combining optimization of assets, to the cost efficiency and discipline. Management effectiveness, supported by controls, processes, systems, organizational structure and institutional performance. Keeping the business growth with the value creation (returns above capital cost), aiming at higher market value and ensuring profit to its shareholders. Excellence in the implementation of power projects merges/ acquisitions and innovations. Risks and impacts GRI G- Various scenarios can affect CPFL Renováveis business, among which there are political, regulatory, economic and socio-environmental conditions. 3. Sustainability & relationship. People management To be a reference in sustainability, fostering the social, environmental and economic balance, in the communities where it operates. Consolidate good quality relationships with customers, suppliers, regulatory and governmental agencies, sector institutions, investors and the tertiary sector. Ensure a stimulating and challenging work environment, which makes possible the commitment and development opportunities for employees and partners. Labor safety and diversity respect are nonnegotiable values. Annual Report Annual Report

6 Among many subjects that can represent internal risks for The employee s rotation rate is still relatively high in the the organization, the company understands that health company, because of the structural changes occurred in and safety, human rights, ethic and corruption risks, have the last years, and it is monitored attentively in order to pre- low probability to occur. In general, the safety issue is a vent it from offering risks to the company s management. concern in the power sector as a whole, but it is less repre- In 01, the employees rotation indicator reached 1.%, sentative in the renewable sources segment, as compared to 19.8% in the previous year. it presents low risks of accidents in the operations or even in the implementation of its projects. Nevertheless, the company considers as extremely important the monitoring of risks in the Health and Safety and works in an effective manner to prevent accidents, as we will explain in the Chapter Management and Results, Human Assets item. programs. In the case of biomass plants, labor and human right issues in the sugar cane plantations can represent reputational risk for the company, wich tries to monitor such aspects with it suppliers, as we will explain below, in the Management and Results Chapter, Social Assets item. Ethics is part of the company s daily routine, which values In case of specific risks related to the CPFL Renováveis activities, the hydrological risk due to the water shortage was the one that most affected the company in the last year, causing the operation interruption of the SHPPs turbines and affecting its capacity. Even though the diversity of sources used by the company, allied with Renováveis sees the relationship with the communities as an extremely important and relevant aspect to its business strategy. The oriented to the society dialog are described in the item Social Assets, chapter Management and Results. In the Natural Assets item it is possible to check the efforts carried out by the company to mitigate its greenhouse The company s enterprises generally also have very little the transparency in its relationships and guides its behav- the regional decentralization, ensured that the business gas emissions, solid waste and wastewater. impact over the communities in which they are inserted, ior based on a formal ethics code that is available to all could remain stable. With the GSF issue resolution as Impacts in the ecosystems and in the local biodiversity are and currently, do not have a direct influence in any qui- of its employees. The main risks related to corruption in previously described, the perspective is that such risks checked and monitored, as well as the intention to work in lombola, indigenous or other minority group commu- the activities of the company are those of public compa- become increasingly lower. a preventive manner. nity. The wind farms installed in the Northeast region, for instance, usually bring benefits to the local communities, generating jobs and investments in socio-environmental nies and regulatory entities employees favoring the obtainment of licenses or operation approvals. At the same time, adopting a behavior in conformity with the laws and regulations is essential for the business, paying attention particularly to the environmental licenses and labor laws. This way, issues such as corruption and conformity are treated in a The hydrological risk for the local communities, by its turn, after the implementation of SHPPs is considered low, as these are small size interventions. Even so, CPFL The entire renewable energy segment is facing a moment of big opportunities, in which the use of alternative energy sources is becoming more necessary and urgent in order to reduce the socio-environmental impacts in a sector that cannot stop growing. preventive manner, as described in the Transparency item, in the Governance chapter. São Gonçalo SHPP Tanquinho Solar Complex 6 Annual Report Annual Report 7