Why this electrical component supplier is sharpening its focus on renewables

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Thursday, April 13, 2017

Brazilian Energy Efficiency is the new name of Inepar Capacitores, a former subsidiary of local group Inepar SA Indústria e Construções. Brazilian Energy Efficiency's commercial director, Ricardo Woitowicz, talks to BNamericas about the venture and the opportunities that a growing renewables sector is generating in the area of energy quality.

BNamericas: Inepar SA Industria e Construcoes recently sold its energy efficiency unit, which is now called Brazilian Energy Efficiency. What was the reason for this operation?

Woitowicz: Inepar's unit that provides energy efficiency and services for distribution and transmission companies experienced strong growth in the 1990s, when the group installed one of the largest capacitor banks in the world, for the transmission system of the Itaipu hydropower plant [on the Brazil-Paraguay border]. After that, Inepar decided to diversify its operations, targeting infrastructure projects such as subway systems, and also other sectors, for example, oil and gas. As a result, the energy efficiency unit was not getting as much attention as other units of the group.

In 2014, the Inepar group filed a request for judicial recovery. At that time, I was an employee of the company. As the group was focused on capital goods and was also facing financial difficulties, it was decided that the energy efficiency and services unit would become a new company within the group, called Inepar Capacitores. After that, the unit was put into the group's list of assets for sale, following the judicial recovery plan.

BNamericas: So, Inepar Capacitores was sold and the new shareholders decided to change the brand, but most of the technical staff were kept. That was the idea?

Woitowicz: Yes. I started talking to investors who had thought about investing in the company and also had a strategic interest in keeping the technical part of the division. Inepar group had already conducted a road show and had received some offers from other companies. When it came to the public auction, held in October 2016, Inepar Capacitores was bought by a group of investors [of power generation, civil construction and services sectors, with a total of 51%] and by the employees of the company [49%]. The operation is called a management plus investors buy out and it allowed a smoother change after the company's sale.

BNamericas: After the sale, how did Brazilian Energy Efficiency structure its client portfolio?

Woitowicz: Just as Inepar Capacitores was, Brazilian Energy Efficiency will be a services and equipment supplier to energy distribution companies in the country, in addition to others from other Latin American countries. We also see very large growth in the wind power market, which, unlike hydropower, has greater demand for advanced technologies to connect the plant to the power transmission system. The investment of our wind generation customers has grown. Our main focus is the market of energy quality, which is a new, rising market.

BNamericas: Why is demand growing in the energy quality market?

Woitowicz: The services and products of this area aim to ensure the safe and stable supply of electricity, reducing variations and losses. This market has grown a lot over the past years, especially because of the change in the energy matrix. Brazil is increasing its portfolio of wind and solar power plants, and those need technology to secure the energy supply.  Demand from these is different than demand from hydropower plants, for example, which are more stable in the electric system. In conclusion, a more renewable energy matrix requires more investment in the quality of energy supply and also in energy efficiency.