Brazil's Raizen launched a new brand — Raizen Power — focused solely on power, with big plans for the liberalized power market and aiming to become a one-stop shop in the sector. Argus spoke to Daniel Sica, the firm's power, biomass and gas trading director. Edited highlights follow.
What are the sources of Raizen's power generation?
At its creation, as a joint venture between Shell and Cosan, Raizen already had electricity generation plants, using the biomass from sugarcane. At first, the plants mainly [sold their generation] in regulated power auctions and a large part of them still do. But Raizen also has plants in the free market, with some long-term contracts. Over the years, Raizen anticipated that auctions would no longer take place, as the market tends to be free in the future.
Raizen is increasingly positioning itself in the power sector and this is why we created a new brand: to showcase the company's presence and its growth in this market. The power market is in complete ascension. Its numbers are very expressive.
Today, Raizen has 35 biomass-fired plants, among them 20 co-generate power and sell it to the grid. It has 35 additional distributed generation plants, some small hydroelectric plants, some residue biogas plants, as well as a vinasse biogas plant. That totals 1.5GW in capacity.
What does Raizen see for its future in the free power market?
Raizen believes and has been following the growth of the free market. It has been positioning itself in the free power market through a commercial presence. From large consumers — who have been in this sector for many years and already know it very well — to the new players, seeking to bring competition to these customers through customized solutions for each of the niches.
We understand there are different visions in each of these niches and seek to adapt to each of them, bringing customized energy solutions. Our portfolio includes products, such as electromobility, positioning Raizen Power as a one-stop shop.
What are Raizen Power's plans for the international renewable energy certificate (I-REC) market?
All our plants can be registered for I-REC issuance.
We have been negotiating an important volume of I-RECs and all energy sold to our new customers is 100pc certified. So I-RECs for us are not only a product [in itself] but also a certification of the energy product we are delivering to our customers.
We see a future of growth for this market. It is not yet a mandatory market in Brazil, but we see a growing appeal for this certification. We see that there is a great appeal today for renewable energy and this is the way to prove [the origin of power] today. If there is another model in the future, we will be there, too.
What are your plans for your distributed generation plants?
Distributed generation is the way to reach consumers that we cannot reach through the free market. Raizen already has 35 distributed generation plants and serves a large set of consumer units. In the future, it will be a transitory solution for customers who will be in the free market.
We have distributed generation through sugarcane bagasse, through small hydroplants, residue and solar.
