'Electric cables have become a strategic issue' – Prysmian Brazil CEO
Italian electric cable manufacturer Prysmian foresees major business opportunities in Brazil over the next few years, given the expansion of the country's energy transmission and distribution grids.
Another important driver is the oil and gas sector, which is becoming increasingly electrified to gain efficiency and reduce its environmental impact.
In this interview with BNamericas, the company's CEO in Brazil, Raul Gil, analyzes the global and local scenarios and trends.
BNamericas: What is the outlook for Prysmian's business?
Gil: Electric cables have become a strategic issue.
The whole decarbonization process is basically connected to renewable sources and the electrification of the energy matrix, which requires cables.
So we've gone from a time when cables were a product basically associated with the industrial value chain to being at the center of a global macro-trend.
This changes our positioning. We’ve become an essential company for decarbonization.
BNamericas: What about Brazil?
Gil: The energy transition will only happen if there’s no additional cost in electricity and energy, and Brazil is good at this. Solar energy, for example, began with subsidies and ended up competing in the free market.
Brazil has a practically unique electricity matrix, with renewables accounting for about 75% of the total. It's a very privileged matrix.
So what are the next steps?
Today, energy consumption per inhabitant in Brazil is relatively low, but it will grow because there’s a lot of potential in the emerging middle class. And this has to happen with renewables.
Therefore, it will be necessary to reinforce the grid via transmission auctions and invest in new distribution grids for distributed solar generation.
The transportation sector is very poorly electrified, so I see a great opportunity in this area too.
In addition, Brazil has enormous potential to export energy, including green hydrogen, taking advantage of its low power generation costs.
This also goes for neighboring countries, which can receive electricity via overhead or submarine cables.
BNamericas: How do you see the prospects for electrification in the oil and gas sector?
Gil: The electrification of production platforms is a worldwide trend, and this should also happen in Brazil.
We have a factory in Vila Velha [in the state of Espírito Santo] that makes umbilicals that are hydraulically driven, but which tend to be electrically driven. This is something that is on our radar.
BNamericas: Petrobras is contracting an "all electric" FPSO. Will this also happen in the subsea? Will the subsea-to-shore model, which involves eliminating the topside, be a reality at some point in the future?
Gil: The topside is already very electric, and the seabed will follow suit. Subsea to shore depends directly on electrification.
BNamericas: Turning to the electricity sector, what opportunities are there?
Gil: Our core business is the world of electricity generation, transmission and distribution.
For example, we have 345kV projects to bury cables in the urban center of São Paulo; direct current projects in the Amazon, in order to transport energy from there to the southeast region; transmission cables for companies like CPFL Energia and Neoenergia.
As I said, renewables are going to grow in Brazil, both centralized and distributed solar, as well as wind power. And this will require investment in transmission and distribution. I see the next 15 years as a very fertile period for these segments in Brazil.
We have an important presence in these areas. These will be very productive years for us in the country.
Brazil has many suppliers of low-voltage cables, with lower technology. When you increase the technology, you increase the voltage of the cables. That’s where we’re even more competitive.
The quality of the power grid in Brazil has a lot to improve. There are lots of old overhead lines. And this is a business opportunity for Prysmian, not only in terms of stability but also in terms of safety. There are many fires and even deaths that occur due to a lack of safety on the network.
BNamericas: What investments does Prysmian plan to make in Brazil?
Gil: We’ve invested around 400mn reais [US$80mn] in Brazil over the last five years, and we’ll invest more than 50mn reais in the country in 2023.
We’re investing in capacity. We have a factory in Poços de Caldas, in Minas Gerais, which is the largest plant in South America, where we produce medium and high voltage cables. We’re commissioning a fifth production line and are already thinking about a sixth.
Written by: Joao Montenegro