Consolidated Platform with Unique Scale
Unique growth story in the Brazilian power generation sector
One of the largest power generation companies in Brazil
Strategically located in the largest consumer market with very low submarket demand risk
Synergetic and highly efficient geographic footprint
Long-term Contracting Profile with Unmatched Volume Risk Mitigation
Leading position in energy commercialization
Balanced PPAs portfolio and assertive commercial strategy
Superior GSF protection
Technology boosting the energy trading beyond the asset
Assertive commercial strategy: superior gross profit growth
Disciplined Execution Track Record, Delivering Growth and Profitability
Long-term optimal capital allocation track-record
Strong asset operation know-how ensuring high availability levels
Efficient OPEX structure resulting in superior profitability
Solid financial performance
ESG at the Core of the Business Model
ESG goals in seven priority themes + a leading role on climate change and energy transition
Strong commitment on the reduction of environmental impacts
Thorough dam safety process, fully approved by ANEEL
Social responsibility and safety commitment with employees and communities
Solid corporate governance model composed by experienced leaders
Low-Risk Growth Plan Focused on Organic Initiatives
Clear value strategy
Portfolio Optimization Strategy based on CTG’s assets
Top-Tier Engineering Core with Greenfield Experience
Fragmented market creates potential for consolidation M&A
Our main strategy is to achieve operational excellence, operating our plants with high quality and safety standards, and leading the processes in accordance with the best market practices. Therefore, we have defined five guidelines:
- achieve high quality standards, bringing operational safety to the level of China Three Gorges International;
- improve the safety and well-being of our employees and third parties, aiming at a zero-accident environment.
- modernize obsolete or critical equipment, according to the annual criticality assessment, with the aim of increasing the reliability and availability of power generation;
- use technology and intelligence to optimize processes and structures in order to increase efficiency and cost-effectiveness; and
- seek corporate structure and streamlined and efficient services to reduce the burden of General & Administrative Expenses, increasing quality and competitiveness.
We use innovative solutions to optimize the risk-return ratio in the sale of energy, with the aim of increasing our commercial efficiency, by means of:
- improving the management of our energy portfolio to optimize margins on energy sales and purchases;
- innovation and technological intelligence to improve price forecasting and reading of markets where we work;
- implementation and expansion of directional trading;
- anticipating trends in the Brazilian electricity market to develop new products and capture new customers (with the development of digital platforms such as CTG Conecta, one of the pioneering platforms in operation); and
- growth support to find attractive businesses and reliable off-takers for our new projects
In recent years, we have shown its financial discipline through our financial statements. We continue with the continuous improvement in this strategy by improving the culture of efficiency and austerity, ensuring that processes and initiatives are aimed at creating value. To this end, we have the following initiatives in place:
- improve solid cost control through the Zero Base Budgeting Methodology;
- workforce planning and structuring to optimize human resources as CTG Brasil prepares for future challenges;
- build a portfolio of value creation initiatives to explore optimization opportunities for efficiency and cost reduction;
- superior cash management and financing plan to optimize finance costs and support growth strategy; elimination and management of currency exposure to avoid losses and volatility of results
We employ the sustainable growth and strengthening of our business, based on the development of skills and the use of our competitive advantages, through the following strategies: (i)
- search for new acquisitions, taking advantage of the end of hydroelectric plant concessions;
- development of an investment platform in wind and solar energy construction projects, exploring the rebalancing between demand and supply;
- diversification of energy generation sources to mitigate hydrological risk and create value from the portfolio effect;
- proactive action to develop a local storage market (pump and batteries) and continuous search for new asset acquisition opportunities (M&A); and
- evaluation of opportunities for optimizing the portfolio in relation to assets of low strategic value, such as PCHs and assets with non-controlling interest.
About 50% of all the Company’s contracted physical guarantee was under the Free Contracting Environment (“ACL”), that is, just half of the portfolio is negotiated directly with generators and traders, which allows competitive advantages with prices, and terms and more flexible conditions compared to the regulated market. Combining competitiveness with operational efficiency, approximately 45% of the Company’s portfolio follows the Quota System. This regime is a special model of the Regulated Contracting Environment (“ACR”), which protects the generator from hydrological risks and from the financial results of the Energy Reallocation Mechanism (“MRE”) associated with the hydroelectric plant, in accordance with the regulation in force. The remaining 5% of the entire physical guarantee is sold at the ACR, where all contracts are also protected by GSF (Generation Scaling Factor) insurance, which guarantees hydroelectric power generators greater protection against the hydrological risk linked to the volume of rainfall in the watersheds.
As part of our growth strategy, in addition to seeking to expand our clean energy generation capacity, we seek to diversify energy sources in order to mitigate exposure to the same weather, water and market risks. This diversification strategy between water, wind and solar energy sources generates the so-called “portfolio effect”, in which there is a negative correlation between such sources in the country. The effect is responsible for guaranteeing an abundance of clean energy against the seasonality of the seasons throughout the year, which is responsible for strengthening our energy generation capacity. .
Our plants have high construction quality, high reliability and availability of equipment, where part of them have already been renovated and modernized and the others are in the process of being modernized. As part of the economic group of China Three Gorges International, we have commercial and strategic relationships with the world’s main manufacturers of power generation components, in addition to having strategic cooperation with the main suppliers of Engineering, Procurement and Construction (Engineering, Procurement and Construction – EPC), and a strong relationship with leading renewable energy developers globally.
We currently have more than 530 employees fully dedicated to the operations and modernization of our hydroelectric plants, and an optimized O&M (Operation and Maintenance) management structure for our assets, with experienced and qualified professionals, a robust structure of policies and procedures, in addition to predictive maintenance systems with real-time monitoring of the main parameters of the main equipment in the plants, which contribute to the high quality and efficiency of our operations.
In 2021, we invested BRL 445 million in our generation assets, an amount in line with the investments made in 2020 and 2019, with the aim of modernizing equipment and ensuring high standards in the management of our assets.
Investments in Research, Development and Innovation (RD&I) constitute an important lever for the development and sustainability of CTG Brasil, contributing both to the excellence of existing businesses and helping in the pursuit of new business opportunities. Through our corporate RD&I program, the Company seeks to generate solutions to its challenges, in the electricity sector and society, also contributing to the development, including scientific development, of Brazil. CTG Brasil is focused on continuing to invest in the Brazilian hydroelectric matrix, as well as placing emphasis on the diversification of its asset portfolio and the complementarity of energy generation sources.
In 2021, we invested BRL 23.8 million in our corporate R&DI program, using primarily funds established by ANEEL’s Research & Development (R&D) Program, which establishes the guidelines for the Company’s projects and assumptions aimed at promoting the culture innovation and encourage the generation of knowledge in the electricity sector. These investments exceeded the Company’s annual obligation by 46%, which was BRL 16 million for 2021, under the terms of ANEEL’s R&D program, maintaining the investment level of the previous year. Also in 2021, we continued our innovation agenda, counting on the support to advance the partnership with the National Service of Industrial Training (“SENAI”), and we were the first company to inaugurate its Habitat of Innovation Institute for Renewable Energies (ISI- ER), in Natal (RN). In addition, in the first half of 2021, we started the internationalization plan of its agenda with the presence of its activities for prospecting partnerships and projects in the European region, with the implementation of a job in Germany and a representative of the partnership fully allocated.
Another initiative is the Digital Innovation Laboratory (DIL), which has a solid partnership with the Santa Catarina Technology Association (ACATE). This project aims to develop an agile and adaptive methodology focused on information technology solutions to support operational management, asset management, corporate management, and operation and maintenance of generation assets, connecting the company to the innovation ecosystem, allowing to create new products, solutions and businesses with greater speed and lower cost. Among the applications developed, it is worth highlighting the commercialization platform – CTG Conecta, the new intranet – +CTG, fleet management system, platform with the use of automatic information processing to support the management of litigation and the use of smart badges for managing health and safety training.
In 2021, we were chosen as one of the leading companies in open innovation in Brazil, appearing in the TOP 5 Renewable Energies category of the 100 Open Startups Ranking, released by 100 Open Startups in October 2022. We had three winning projects at the International Innovation Awards 2021: (i) “Prototype of servopneumatic unit for turbine speed regulation”, in the Product category; (ii) “Local development of sustainable tourism”, in the Organization and Culture category; and (iii) “Dissemination of information through social media”, in the Solutions category. In addition, the Company received an award at the Chinese Enterprise Global Image Summit 2021 with the project “Control of golden mussel infestation by genetic infertility”.
The growth of renewable energy sources requires the development of new technologies for its continuity. Although solar and wind sources are very important in the decarbonization of electricity generation, industrial consumption and heavy logistics activities still pose a challenge to the environment with CO2 emissions. Regarding the difficulty in investing in the use of batteries and other storage technologies, the most relevant alternative is energy from green hydrogen, a 100% renewable source, obtained from the electrolysis of water, using renewable energy sources in this process.
In order to lead the energy transition agenda, we are investing in disruptive technologies to change the global energy landscape, such as green hydrogen. In 2021, we launched the so-called Green Hydrogen Strategic Mission, in partnership with SENAI. The initiative was responsible for attracting more than 30 projects, in 13 different states, totaling BRL 183.7 million in proposals, 10 times more than the amount foreseen in the public notice of the Strategic Mission Hidrogênio Verde (BRL 18 million). Our objective is to develop a pipeline of investments in green hydrogen, in order to create a more organic dynamic with the green hydrogen ecosystem and position ourselves as a reference in the subject.