MADRID, Spain, Oct. 18, 2018 (Press Release) -Ence Energía, S.L.U. has signed an agreement with Iberdrola Renovables de Castilla La Mancha, S.A.U. for the acquisition of its 90% stake in Puertollano solar thermal plant, for an amount that could reach up to 145.8 million euros. The agreement is subject to IDAE, owner of the remaining 10% of the plant, not exercising its right of first refusal.
The agreed price amounts to 139.5 million euros, excluding a cash balance of 41.5 million euros. Additionally, the agreement defines an earn-out up to 6.3 million euros. With this transaction, ENCE takes its first step towards diversification to other renewable technologies which allows the Company to obtain similar profitability to that of its biomass generation plants. This acquisition will provide ENCE with a stable annual EBITDA of 18 million euros before synergies.
The solar thermal plant in Puertollano is adjacent to the new 46 MW biomass plant that ENCE is building in the same location, in the former Elcogas site. This is an example of a successful transition from a fossil fuel generation model to renewable energy while keeping rural industrial employment, thanks to the use of surrounding agroforestry biomass as fuel.
It should be noted that there are significant potential synergies between the two renewable energy plants, given their proximity.
Moreover, ENCE is firmly committed to the hybridization of some solar thermal power plants with biomass plants to convert a non-manageable renewable asset -which only generates energy during the sun light hours - into manageable, thanks to the capacity of the biomass to produce programmable, firm and stable energy and at high demand slots.
With high CO2 prices, renewable energy generation with biomass not only competes with gas but also creates and settles rural employment and prevents both fires and the highly polluting uncontrolled burning of agricultural stubbles. It can partially replace thermal coal plants in the National Electricity System.