EDP, the renewables unit of Portugal's largest utility, is in talks to sell power directly to Japanese and Korean companies as a way to boost growth in Asia, a change from the traditional contracts with state entities.
The unit, EDP Renovave is SA (EDPR), plans to invest 21 billion euros ($23.12 billion) in renewable energy over the next four years, with 80% in North America and Europe. However, EDPR is making deals with corporates in a bid to break into the Asia-Pacific region.
"We're actually in negotiation…and actually starting to open up to the Japanese and South Korean corporates, which can itself be a huge enabler for growth," said Pedro Vasconcelos, the chief operating officer for Asia-Pacific.
Of the EDPR's total energy portfolio, the Asia-Pacific region accounts for only 5%.
But its major investments in renewable power projects in Vietnam and the acquisition of solar firm Sunseap helped grew its Asia power generation capacity 25-fold to 712 MW within just a year.
EDPR is now looking to add new capacity in Australia and China, aiming to replicate its operations in Singapore, where it supplies green energy to Meta, Amazon, and Microsoft, Vasconcelos said.
Unlike Europe and the U.S., only a few countries in Asia have clearly defined regulations and policies on fiscal support, said Miguel Stilwell d'Andrade, chief executive at EDP and EDPR.
"It's really more a question of defining the clear regulatory framework so we can make long-term investments," he said.
Links to grid networks and mechanisms like auctions to enable long-term renewable energy supply deals would help grow such investments, he added.
Governments worldwide have sought to balance tax revenues with incentives to attract new renewables investments for achieving energy transition and carbon neutrality.
The European Commission in February unveiled a green deal industrial plan in response to the U.S. Inflation Reduction Act (IRA), which it fears could disadvantage companies based in Europe.
EDPR was one of the companies which decided to deploy more capital in the U.S. after the IRA.
Taxes and caps on power tariffs in some European nations stifled new investment, while U.S. policies spurred companies to invest there, Stilwell d'Andrade said.
"If you're constantly going to be taxing, capping prices or clawing back profits and revenues, then you will not have enough capital," he said.
