Grenergy Renovables SA

MAD:GRE

Earnings Call Analysis

Robust Operational Execution and Revenue Growth

The company showcased a solid operational execution with a stable solar pipeline of 15.3 gigawatts and expanding battery energy storage system (BESS) capacity, now at 11.3 gigawatt hours up from 10.7 gigawatt hours in the last quarter. This expansion indicates optimism for further growth, particularly within the BESS sector. Meanwhile, strategic projects such as Oasis Atacama and Quillagua are advancing well, with some phases already under construction and vital power purchase agreement (PPA) deals being secured – the most notable being a 15-year hybrid premium PPA promising approximately $600 million in revenue. With €3.7 billion in contracted revenues over the next 15 years, the financial outlook is buoyed by such predictable and substantial income.

Financial Deleveraging and ESG Progress

Financially, the company is on a path to substantial deleveraging, with projections reflecting a total leverage ratio of 3.x% and a pro forma corporate leverage of 1.1x post the Peruvian disposals, which will impact Q1 reporting. This signals financial prudence and a stronger balance sheet. On the environmental, social, and governance (ESG) front, they have rolled out a new ESG roadmap for 2024-2026 and launched a sustainability report, demonstrating a commitment to holistic corporate responsibility.

A Focus on Renewable Energy Expansion

The company emphasizes their growth in renewable energy, with a current status of 15.4 gigawatts of solar and further investments in their BESS portfolio. This balanced approach to both solar and storage solutions underlines their forward-thinking strategy in a rapidly evolving energy sector.

Defensive Business Model with PPA Strategy

Highlighting a defensive business model, the company relies on long-term PPAs to hedge 75% of their energy production from 2026, promising greater stability and predictability in earnings. Such contracts are crucial for obtaining financing and delivering projects. Despite expanding operations, the company maintains a conservative stance with only 25% of its energy sold at merchant prices and a mere 5% merchant exposure in Spain, showcasing prudent risk management.

M&A Activity and Project Transfers

The company has been active in mergers and acquisitions (M&A), having completed the sale of solar and wind assets in Peru for about $150 million, reaching 55% of the targeted proceeds for their planned asset rotations. Notably, they remain open to further opportunities that may arise beyond their current target, signaling flexibility and adaptability in their corporate strategy.

Guidance for Future EBITDA Growth

While specific guidance for 2024 EBITDA was not disclosed, the company has provided a forecast for 2026, targeting between €150 to €200 million from energy sales, with a run rate of €250 to €300 million once the first four phases of Oasis Atacama are operational. This suggests a strong growth trajectory for the company's energy business segment in the coming years.

Earnings Call Transcript 2023-Q4

[Alberto Sanchez, executive]

Good morning, everyone, and welcome to Grenergy's Full Year 2023 Results Presentation. I am Alberto Sanchez, Head of Investor Relations, and I'm joined today by David Ruiz, our CEO; Daniel Lozano, [ RFT ] for Strategy and Capital Markets Officer; and Rocio Fernandez, Head of Sustainability. They are going to take us through our business, financial and ESG review. At the end of the presentation, there will be a Q&A session for sell-side analysts. I hand over to our CEO, David Ruiz.

[David Ruiz de Andrés, executive]

Thank you, Alberto, and good morning, everyone.

Moving to our highlights slide on Page #3 of the presentation, I'd like to remark, highlight our solid operational execution. Right? I think our pipeline in Solar remains stable at 15.3 gigawatts. We have had some further growth in BESS in 11.3 gigawatt hours. This is from 10.7 gigawatt hours last quarter, last update. I think we will still see some increases in following quarters in Solar, but we are reaching really our sweet spot in some markets, the level of projects we believe we're going to need for the coming years. I think, on the other side, we will see -- we still have a lot of room for growing in BESS.

Our key projects are advancing Oasis Atacama and Quillagua, the second part of Quillagua, Phase 2 of Oasis Atacama. It is already under construction. This is, I think, great news. Very soon, we will also move Phase #3 and #4, [ Mitajara ] and [ Navilla ] to the under construction status.

I think we have great news in the last few weeks on PPAs, M&A, financing, good progress on Oasis Atacama. We just closed a new 15-years hybrid premium PPA for a total of 720 gigawatt hours per year. This is what we call Phase 4. It's been signed with a global investment-grade utility. And it's a very important milestone for us. It's the largest and most important PPA we've ever signed, that has never been signed by the company. We're talking about close to USD 600 million in revenues in 15 years. This is way bigger than the PPA we signed with Amazon last year and, well, similar to all the PPAs we've signed with [ Copec ]. And is the third important PPA we've signed in the last 12 months, and we keep working on new PPAs in all 3 regions.

I'd like to remark that we already have EUR 3.7 billion in revenues contracted for the next 15 years, which is something, I believe, quite remarkable and growing every quarter.

I think it's important to outline also our strategic deal with BYD for the supply of the first 2 phases of Oasis of Atacama for the battery supply. We keep negotiating hard to reduce CapEx, and I believe we might announce the procurement agreements for Phases 3 and 4 in the next few weeks, could be either with BYD or other premium manufacturers.

Going to M&A, well, we recently also announced the sale of 174 megawatts of solar -- both solar and wind assets in Peru for roughly USD 150 million. This implies a 1.3x enterprise value invested capital ratio. And after this deal, the equity proceeds already have -- on our build-to-sell activity, have already reached EUR 314 million. This implies 55% of our EUR 0.6 billion target that we outlined in our Capital Markets Day. So, we are still at the beginning of 2024, and we have already achieved 55% of the proceeds we outlined for the period between 23% and 27%. I think it's quite remarkable.

Going to -- we've made a further step on our investment plan, in our project finance. We just announced yesterday the closing of EUR 175 million nonrecourse financing for the construction of 300 megawatts in Spain. These are the projects that will transfer to Allianz in Q2, at the end of Q2 next year. That has been an important milestone for us.

A strong set of results for 2023, revenues more than EUR 400 million, and this is 7% up compared to the same period last year. EBITDA 2x higher, driven by asset rotation in energy business. This is, for the first time, more than EUR 100 million, EUR 105 million for 2023. And net income has -- is 5x higher despite higher financing costs in the period.

Just to put things in perspective, we are coming from EUR 11.3 million revenues and EUR 23 million EBITDA in 2020. So just to give an example, okay, the company, in only 3 years, has multiplied by 4, the revenues by 5 -- 4x and 4.5x EBITDA, just to put things a bit in perspective.

We are also achieving a substantial deleverage, especially on a pro forma basis, assuming the Peruvian disposals that will be closed -- have been closed in December, but will be reflected in Q1. Considering that, the total leverage was 3.x% and the pro forma corporate leverage, 1.1x.

And very important achievements in ESG, as Rocio will give plenty more information about our new ESG road map for 2024-2026. Our net zero 2040 strategy has been approved.

Our sustainability report 2023, there's a lot of work there, has been published today. And I think it's the second year we do a third-party verification and, well, great improvements also in ratings.

Moving to the next slide about the platform overview, well, I already outlined that we have 15.4 gigawatts of solar, 11.3 gigawatt hours of BESS. I think we are giving every time more and more information, right? And you will see in the following slide.

And I think we already do have one of the best global platforms in the regions where we are in PV. And we really want to make a difference in BESS and in storage. And I think we are creating a very attractive and well-balanced portfolio of BESS projects.

Moving to the next slide, well, no major changes in Solar from the peak figures provided at the Capital Markets Day. I think we're putting great efforts in BESS. I think they're bearing fruit. We have increased the total platform [ 6.1 gigawatt hours ] 0.5 gigawatt hours increase in assets under construction, so we're already 1 gigawatt hour of phases 1 and 2 of Oasis Atacama. As you know, there are many players now talking about BESS, but very few of us are actually building and closing PPAs based on PV storage, and we are very proud of what we are achieving.

And, well, you can see also in the chart, in the table showing the portfolio of BESS projects, that actually there is life after Valkyria. Well, we have all the portfolio in Chile, whatever is already under construction, whatever it is in backlog, will get into construction very soon. This is Oasis Atacama. But look at our pipeline in Spain. Well, in -- we already got to our BESS system. Escuderos project has been eligible to receive next-generation funds addressed to energy transition. It's been a very important achievement. Look at Italy, U.K., Poland. So, we can say that our pipeline of BESS is advancing at a very good speed in Europe, and it's also very well balanced in the U.S., where you can see 3 gigawatts in early stage. So, this is our intention to have a very balanced portfolio of BESS projects as well.

Moving to the next slide about PPAs, we have -- you know we are -- really have a defensive business model. We want to have visible, predictable earnings. And thanks to our strategy to contract -- we are contracting most of our energy production. PPAs are really critical to obtain financing and, therefore, to deliver projects, right? And again, we like to show what we have achieved in the last few years and how this is getting the acceleration we are getting. We have PPAs signed for 3.5 terawatt hours. This is -- 75% of our production from 2026 has been hedged with PPAs. Compare this 3.5 terawatt hours to 1.2 terawatt hours that we are reporting for 2023. And we are also achieving much higher prices in some of these PPAs, considering we are delivering energy at night. So we -- the size of the company will -- in terms of energy, delivery of energy, will get -- will become 3, 4x bigger than it is now only 3 years from now.

Only 25% of our output is sold on merchant prices. And, well, in countries like Spain, we only have 5% merchant exposure in Escuderos plant. The rest is contracted.

We have, again, as I mentioned earlier on, already contracted EUR 3.7 billion of revenues in the next 15 years. Well, that includes, obviously, the new PPA signed for Oasis of Atacama.

Moving to the slide about Oasis Atacama, again, good news, we already have a new PPA for Phase 4. Again, this is the most important PPA we've ever signed. Only Phase 5 is pending, and we might announce a PPA in the next few weeks. So all Oasis Atacama will be fully contracted. We have already -- Phase I and Phase II are already under construction. And, well, we also announced the procurement of the battery packages for Phase 1 and 2 with BYD, as I mentioned, right? So very, very happy, everything is moving smoothly. And, well, we'll keep updating any information regarding this project, considering it's very important for us.

And finally, some update on the M&A, on build-to-sell, we already mentioned that we have already, in Valkyria, we've sold 447 megawatts in Spain for EUR 445 million. This is the enterprise value. This is implying close to 1.5x EV/IC.

We have very recently announced a very important bill for us in Peru. We are not leaving in the country in any case. We are just rotating our 1.0 assets, and we are concentrating in new projects and new PPAs. So, hopefully, we will have some new build-to-sell activity in the country in 2025 and 2026.

The Peruvian projects have no associated debt. So the proceeds will immediately reduce our corporate debt in the same amount. So it's net proceeds of EUR 150 million -- sorry, USD 150 million. Considering all the asset rotation of 643 million, this implies 40% of our target. We outline between 350 million and 450 million for the period 2023-2026. But talking about proceeds, as I mentioned, we have already achieved 55% of the EUR 0.6 billion target we outlined. So, I think we are really on track on this side.

So I hand over to Daniel for the financial review.

[Daniel Herrera, executive]

Thank you, David. Let's move on to the financial review that's starting on Slide #9. Total output increased by 24% due to new capacity and better load factors. Contracted volume increased as well by 34% to 797,000 gigawatt hours in 2023 and represented 64% of our total production. Realized price increased by 13% due to both high emission and PPA prices within the period.

Then, on the right side, you have a summary of the main financial KPIs that we are going to explain about later.

If you look at Slide 10, we can see that, in 2023, total revenue reached EUR 400 million, plus 37% year-on-year, and EBITDA increased to EUR 104.5 million, more than twice the previous-year figure. The development and construction division was driven by the disposal of the Belinchon project in Q3, producing close to EUR 70 million EBITDA, and to distribution asset in Chile to PMGD, EUR 11 million with very high margins. And in Q4, there was no asset rotation.

The Energy division was driven, as I said, by higher output of realized price. And finally, regarding retail and supply business in Chile, it's again EBITDA positive this quarter with close to EUR 1 million. Its total EBITDA for 2023 was minus EUR 0.4 million due to the first semester of the year. And we expect this business to be EBITDA positive during 2024.

Moving on to Slide 11, we can see that full year '23 total CapEx reached EUR 366.3 million. That is 88% higher than the previous year figure, reflecting the acceleration in our execution. Project CapEx was EUR 337.2 million, split 37% in Spain and 63% in LatAm, mainly PMGDs and the [ Lanteno ] utility scale project we have just connected. It also includes -- this figure includes CapEx from projects rotated, Matarani in Peru and Tabernas, Jose Cabrera in Spain.

Development CapEx was EUR 29.1 million. Regarding CapEx per megawatt is at all-time lows with panels at 10 cents of dollar. Now CapEx is around EUR 0.4 million, excluding the interconnection line, thanks to the expansion of the global industrial capacity [ post ] polysilicon production. Due to CapEx deflation and PPA levels that we are closing, IRRs remain stable and attractive at double-digit levels, more than offsetting the impact from higher interest rates.

Then, in Slide #12, we have the cash flow for the period. Some key messages. Working capital outflows was EUR 27 million in 2023, implying a substantial improvement from the EUR 76 million outflows registered in the first 9 months of the year. As well, we have an increase in CapEx that has been mainly funded with project financing and the corporate facility signed with Santander and backed with [ Teste ].

And finally, we are closing the period with a cash position of EUR 120 million. Net proceeds from Belinchon had a positive effect in our treasury balance position of close to EUR 90 million.

Now, if you can look at Slide 13, our net debt increased to EUR 579 million, mainly driven by the CapEx acceleration, although the total EBITDA ratio declined to 5.6x from 6.4x a year earlier. However, including the disposal of our Peruvian assets, we will have had a pro forma net debt of EUR 460 million and a pro forma leverage ratio of 3.7x in 2023. Likewise, our corporate net debt would have been EUR 117 million and our pro forma corporate leverage at 1.1x.

Also bear in mind that our recent news regarding the closing of the financing for Tabernas and Jose Cabrera implies shifting corporate debt into nonrecourse debt for the CapEx already incurred. This will contribute to further improve our corporate leverage ratio. As announced in our Capital Markets Day held in November, our investment plan for 2023 to 2026 will be self-funded thanks to our asset rotation strategy, as David said, which already 55% of it has been completed, and the corporate and nonrecourse financial deals plan.

On the whole for the financing part, thank you, I'm going to hand you over to Rocio, who is going to explain our ESG part.

[Rocio Fernandez, executive]

Thank you, Daniel. Good morning, everyone. I invite you all to follow the details of the progress in ESG [ road maps ] during the fourth quarter of 2023.

I am pleased to announce that the 3 goals committed for this period were successfully accomplished. Firstly, a climate change risks and opportunities internal report was elaborated according with the TCFD recommendations. Secondly, the results of the work environment surveys were presented with the aim of implementing actions to boost talent retention. Last but not least, the net zero strategy by 2040 was approved by the Board of Directors. Our net zero strategy [ is ] in place to meet specific targets for the greenhouse gas emission reductions, including not only scope 1 and 2, but also scope 3 of the carbon footprint.

Now let me give you further details about the net zero strategy. Moving on to the next slide, for scope 1 and 2, which means direct and indirect on the [ ESG ] emissions, the commitment is to reduce the 60% of this emission by 2030. And for the scope 3, meaning indirect emissions from our value chains, the goal is to reduce 50% of these emissions in a relative unit by sales. To achieve this ambitious target, many actions have to be done, for instance, the purchase of 100% renewable energy or the selection of green providers of panels and batteries.

Moving on to our position in ESG ratings, I would like to emphasize the fact that, in general terms, Grenenergy maintains its leadership position in the most prestigious ESG ratings. During the last quarter of 2023, some scores were updated, providing us better results than the last year EthiFinance and S&P as well. CDP was also updated on Q4.

And regarding the other indexes, such as Sustainalytics, MSCI and ISS, our score were improved in 2023 compared with the previous year and also comparison with our key peers.

So, that's all from my side. Thank you very much for your attention.

[Alberto Sanchez, executive]

Thank you very much, Rocio. We are now moving to the Q&A session. [Operator Instructions] Our first question comes from Fernando Garcia from RBC.

[Fernando Garcia, analyst]

Thank you, Alberto, for taking my questions. So, I have 2, so, this time. First question is if you can update us about the [ multi ] asset rotation plan and partly [indiscernible] about [ Europe ] and in case that there is any delay versus expectations there, you have other options to finance your business plan.

Then the second question is, well, I was reading in your presentation that you have 75% of the 4 phases of the Atacama project already contracted. I don't know this might be indicating that you are ahead of your plan there. So if you can update us about this project execution?

[David Ruiz de Andrés, executive]

I think the first one is about Valkyria. Well, as you know, when we launched Valkyria, the very beginning, one option was rotating 49% of a large portfolio of one -- I think -- I recon it was, like, 1.1 gigawatts. That included already also apart from Belinchon and the plans that we have transferred to Allianz. It included also Escuderos, [ Almeria ] and I think the first phase of [ CarcamPamor ].

We have achieved 2 transfers already. We have achieved already the proceeds that we were targeting with the transfer of 100% of Belinchon and Allianz. But we have already explained that we keep working in further rotations and particularly in [ Almeria ]. This is, I think, well advanced, but you know these deals, they really need some time. I think we have a fantastic PPA in [Technical Difficulty] has also the same PPA of Tabernas/Jose Cabrera with Amazon. I think it's the best in class, and we are very confident.

So we have several options on the table. One is very advanced, and I think we will provide information in the next few weeks.

This is about Valkyria, about Oasis on Atacama. Again, we are very happy with how things are going. I'm showing this in this update from the Capital Markets Day that was less than 3 months ago. We have already signed the most important PPA in terms of economics, right, which is Phase 4. It's already been signed. We're only missing the last PPA for Phase 5, but that's for 2026 construction [indiscernible] 2025. We -- it's already under construction, all Phase 1 or Phase 2. It's already being procured, the battery packs, from BYD for Phases 1 and 2.

Well, we gave guidance on our expectation for CODs in the Capital Markets Day. So it's Phase 2 Q3 2025, Phase 3, Phase 4 Q4 2025, Phase 1 as early as next Q4 this year. We stick to those dates. Obviously, we have a great incentive to anticipate and start generating energy as soon as possible because every month means quite a few -- makes really a difference. So, we will try everything in our hand to anticipate the COD, or at least start selling energy to the grid as soon as possible.

[Operator]

And the next question comes from Jorge Guimaraes from JB Capital.

[Jorge Guimarães, analyst]

Thank you for the good presentation. I would have a question, as we are limited to one, on the evolution of CapEx cost for batteries. You are now saying it's EUR 180,000 per megawatt hour. So my question is, when do you expect to see the CapEx of batteries being profitable enough to do merchant arbitrage in the Spanish market? So when do you see LCOS of batteries being competitive in Spain?

[David Ruiz de Andrés, executive]

Okay. Thanks for your question. It's -- which is always very interesting. Well, when we say EUR 180,000, we are considering everything, not just the battery, but all the balance of plant, everything included. This is already below when -- we started our Oasis of Atacama project, we were talking about EUR 220,000, EUR 230,000, and still we managed to get an IRR. So things are going down. We expect to see some further reductions, right?

But keep in mind, for Spain, if -- you've got different economics than in Chile, it's not just about the battery CapEx, which is obviously a very important driver. And I think batteries, we believe they will definitely go down in the next few quarters, right? That's our expectation, at least.

But we also need a capacity market in place. This is another very important and we still don't have visibility on that. The government has promised, at some point this year, Q2, Q3, we -- there will be a capacity market. It's basically happening in every country in Europe, but you've got different mechanisms. And it could be like in Chile that you get automatically a payment for capacity, or it could be auctions, or they're different systems. That's another driver.

And the other driver, obviously, in every market is the gap between day and night prices, right? The wider the gap, the more -- the better and the easier for the introduction of storage in the market.

We are very, very confident. I'm very sure that it will happen in Spain. Whether the boom of course, in '25 or '26, '27, it will depend on what CapEx evolution, regulation and other factors.

[Operator]

Our next question comes from Paul Chabran from Kempen.

[Paul Chabran, analyst]

I think you mentioned that you achieved 55% already of your target revenues for BTS with only 40% of target volumes. So does this imply there could be, in the end, an upside on the revenues that you could capture from BTS? Or do you prefer being maybe more conservative and we're getting more assets on the balance sheet by sticking to 100% of target revenues?

[David Ruiz de Andrés, executive]

It's a very interesting question. Well, it's -- I think, first, I think it's great, we do have flexibility. First, we obviously want to make sure we achieve the EUR 0.6 billion target. We are really on track considering we are in early 2024. But whether if we reach that level and we see opportunities to go beyond this level, if we have opportunities to accelerate our build-to-own plan, and we believe that the right way to finance those opportunities are further asset rotations, then we will -- of course, we will look at whatever we think is better for the company and for the shareholders, right? But first, we want to make very sure that we meet our targets in terms of proceeds. And we will obviously study any other alternatives, right?

[Operator]

Our next question comes from Anis Zgaya from ODDO.

[Anis Zgaya, analyst]

Thank you all for the presentation. I have one question. Well, I'll limit myself to one question. Could you give us an indication on the expected EBITDA on -- in '24, including already the disposals already announced and taking into account the energy business contribution?

[David Ruiz de Andrés, executive]

Thanks for your question. We can't really give guidance. Obviously, we have our guidance in mind, but we just, I think, for the first time, provided some guidance in our Capital Markets Day for 2026. Correct me if I'm wrong, Alberto, but we were targeting EUR 150 million to EUR 200 million EBITDA from energy sales in 2026 and a run rate between EUR 250 million and EUR 300 million, obviously, once all the first 4 phases of Oasis Atacama will be in place.

The EBITDA has been EUR 105 million last year. Obviously, we will try to increase that figure. That's all I can say. It really will depend on the [indiscernible], right? I don't know, Alberto, if you want to add anything on this, but I really -- we really don't give -- provide guidance for the year. You analysts have other figures, right?

[Anis Zgaya, analyst]

Yes. Thank you, David. Alberto, do you want to add something?

[Alberto Sanchez, executive]

No, I think that everything has been said by David. Yes, it's too early and too many different moving parts. So it's still early days. We are not ready to provide guidance for the full year.

[David Ruiz de Andrés, executive]

I think you will have, Anis, once we publish the first quarter, you will see the -- well, the [ bill of sale ] EBITDA coming from our Peruvian rotation there. You're right, just to give you an idea. And I think we are providing a lot of visibility on the plans that will be operational this year. So it may be a bit easy to predict, right, then maybe [ Algera ] will make a difference, right? But that's -- I think it's going to be a very predictable year, right?

[Operator]

There are no more questions for the time being. I don't know if anyone wants to follow up.

[Paul Chabran, analyst]

Yes, if I may [indiscernible]. I have a question which conceptually on [indiscernible] it's a large project, also the first of the kind for you. The Phase 1 will be, I think, the most important in terms of not setting a track record of what you can achieve and if you can achieve in, say, in time. Conceptually, what would be, in your view, the main risk of the main execution risk for this project? Is it, I don't know, maybe not getting the battery packs on time? Is it about the construction? Anything? Any insight on what would be the most important risk there?

[David Ruiz de Andrés, executive]

Well, it's a very good question. We have -- I think the last, I would say 2 years, we've been assessing all potential risks. It's something that is relatively new for us. I would say that the market is more mature than what many think, yes. I mean, compared to when we started in solar back in 2007, 2008, things really new, the solar, right? And -- but I believe batteries are quite a mature technology, what we are buying, right? Keep in mind, it's very similar technology to the batteries you find in EVs.

There are already some operational projects in Chile. There is a large project, not as large as Oasis Atacama, but it's quite a relevant project of [ IS Gener ]. That has been operational for a few months. We are monitoring that very well and things are going so far fine. It's not exactly with our BYD manufacturer. I think it's been supplied by Fluence. There is another one operation now that's from a Canadian developer, Inverness, yeah, and it's been running already for 3 months quite well.

The first phase of Oasis Atacama, the first 2 phases -- well, the PV plan is already connected. It's already interconnected. So no risk there, right? So whatever we see, we want to make sure -- this is already an extremely important project for BYD because they have made a lot of publicity on this deal, and I think they have a lot to lose. This is really a flagship for BYD, and we really believe that it's great that they see this as a flagship project. They are selling local teams in Chile. I think they might get a lot of business for them, right?

And I don't know. I think we feel very, very confident. BYD is supplying just the battery part, the battery packs. They will get shipped in Q2. They will arrive p Kigawa ] in Q3, during Q3, for Phase 1, during Q4 for Phase 2.

And everything is fine. We have already procured -- signed all the contracts. The bonds are in place. I think we have a very good set of guarantees. I don't know. We don't see any concern, but it's true that is the first project. So we -- it's also very important that all the technology regarding inverters, converters is being supplied by [ Engertine ]. That is a Spanish company. They have a lot of experience in storage. And, well, they're going to be our partner. They're going to be next to us. They are a large supplier. They've already been supplying us inverters for many years. So, we have a very close relationship.

So I think BYD [Engertine ] is a flagship for all of them. I don't know, nothing can go wrong, really. So this is what we believe.

[Operator]

Thank you very much, Paul. We have received no further questions. So...

[Jorge Guimarães, analyst]

Alberto, if I may?

[Alberto Sanchez, executive]

Yes. Jorge, please go ahead.

[Jorge Guimarães, analyst]

Just a follow-up, I don't know if you already answered this, but do you believe that this recent fall in power prices could create -- I know that you have been selling [indiscernible] and not buying, but probably are vindicated now by the prices you obtained and prices probably will come down. Do you believe that markets, given all the correction, is already -- there are already opportunities for you to buy projects in Spain again? Or it's you prefer to wait on the sidelines until effectively prices go -- prices are already long-term levels. So you have been first to get out. Are you considering to get in again?

[David Ruiz de Andrés, executive]

Yes. Okay. Well, that's -- I believe that Spain will be a line of opportunities, right, but mainly for hybrid plants, [ PV ] storage or stand-alone plants with storage. Look at the boom we are looking -- what is happening now in Chile, yes. And we -- Chile is, let's say, 2 years ahead of Spain with prices collapsing during the day. The PPA market got quite difficult for solar profile. But look at the boom now, no single plan now can be conceived without BESS and we are really getting advantage of our position in the market. And I think that a similar situation could eventually happen in Spain. So, it will be fantastic.

I mean, the great news is that, okay, we contracted all our portfolio for Valkyria. That thing is one of the best decisions we have ever taken, right? And I think our projects are very well hedged and protected with PPAs. And, well, this wave is -- in Spain will be over one day and a new wave will start similar to the one that we are looking at in Chile, right? This is what we believe, but we need to do our homework. We need to make sure we execute and we deliver Oasis Atacama in 2025. I'm very sure we will -- there will be other jurisdictions and other geographies where we could replicate this success. Whether it's Spain or it's Texas, there are many [ sunny ] places in our portfolios.

[Alberto Sanchez, executive]

[Operator Instructions] Our next question comes from Anis Zgaya from ODDO.

[Anis Zgaya, analyst]

Thank you, Alberto. So I have a follow-up question on the PPA market in Europe because I see that you are starting negotiation in PPA in Italy and in Poland. Could you give us an update on PPA marketing in those countries, Germany as well, if you could?

[David Ruiz de Andrés, executive]

Okay. Okay. Well, we -- as you know, signing PPAs is also a lot about the credibility, and I think we are gaining a lot of credibility. If you look at our -- considering we're a small company, right, but we are very high in the rankings in the [ Pegasus Park ] ranking for 2023. We were #3 after Iberdrola and Statkraft, but very close. It was just in Europe, considering the PPAs we have closed with Amazon and LyondellBasell. And we are now talking to, I would say, everyone. As you know, some of the large larger -- well, now, the larger buyers of energy are technology companies like Microsoft, Apple, Amazon, the Magnificent Seven as they are called now. We are basically talking to all of them in all the regions, right? Sometimes it's driven by data centers, AI. We -- Microsoft is extremely active. Amazon has so far been the largest buyer, but followed by Meta, but I think Microsoft is catching up. AI is very -- you know, they need a lot of more energy due to their new AI data centers, right? And this is great news, right? They basically need energy wherever they're going to have data centers, right?

And definitely, Germany and the Berlin area is one place -- that's another thing we're looking at. They are -- you speak to them and they say, okay, I need energy North of Italy, Lombardia, I need energy in Spain, Madrid, or in Aragon because I'm going to have the data center in Saragosa. And I need in the Berlin area, I might have -- I need 100 gigawatts in Poland. And these are the kind of conversations we're having.

So, I believe that there is also a possibility that -- you know, normally, in our business, project comes first and then you find the right PPA. But I think the business might change and, in some cases, the PPA comes first and then you look in the market for the right project to match that PPA.

Germany is definitely -- the problem with Germany is that there are very few projects really ready-to-build. There will be more coming, but it will be a very, very interesting market to match PPAs, especially with large technology and industrial companies. It will be the largest PPA market in Europe. It has been in Spain so far, but -- because there were so many projects, but I think Germany will be a very interesting market for PPAs.

[Alberto Sanchez, executive]

Okay. There are no further questions...

[Unknown Analyst]

Actually, I just want to ask one quick one. So if you look at the Spanish solar prices [indiscernible] for a week, is it still possible to sign a PPA in Spain, even if you wanted to offer a low price? And then there's a lot of developers that put down the down payments for the grid connections. What happens if you don't develop [Technical Difficulty]