Joost Samsom is the founder of Voltiq, a company in charge of maximising renewable energy project returns by raising, restructuring and negotiating debt and equity packages. Samson believes we can achieve using 100% renewable energy, but only with the commitment of the state and a lot of investment. In this interview you will read about our discussion on subsidies. We also discuss limits to this sector, such as lack of sustainable resources used, and the direction in which the sector is going. The goal: making renewable energy available and accessible to all. To find out more, read the whole interview down below!
Rivas Gabriel (interviewer):
Could you tell us a bit about Voltiq, your company, and about your position there?
Joost Samsom:
I'm one of the founders of Voltiq. It was founded at the end of 2009, by myself, and another Dutch guy called Paul Rittersma and a Spanish guy called Manuel Cabrerizo. The three of us knew each other from the times when I worked for a Dutch energy utility company. So we decided, in the course of 2009, that we want to start our own company. Basically continuing doing what we had been doing for our respective bosses, but then for ourselves, and for clients. What we had been doing in our previous jobs was working on all the different contracts to create a new wind project or to create a new solar project. If you want to start a solar project, just as an example, you probably need environmental permits, and you need permits to connect to the transmission grid. But, you also need financing, you need contracts to get the project constructed, you need insurance in order to create the project. We had been doing that for our respective bosses and employers. The thinking behind Voltiq was to offer this holistic service to clients to help them bring their projects to reality. This is really what Voltiq does, the focus is on finance, because it's easier for clients to understand what we do, but we do much more than that. We also work on all those other contracts that are needed to create a project.
Rivas Gabriel: For our readers that don't know much about finance, what is the day to day like in the finance sector?
Joost Samsom:
Financing of this type of projects is typically called assets finance, because you are financing something that is real. It's a tangible project that you can see and that will be there for a long time. So, these types of assets are typically financed on the one hand by what is called equity capital. So, that is usually cash from the investor. And partly by banks which is called debt. Typically that can be like maybe 20 or 30 percent equity capital and maybe 70 or 80% bank financing. So, what we do is basically help get the money for projects, both the equity capital and the debt financing. That money could come from anywhere, if we take a solar project in Colombia, and the money could come from Germany, and the bank financing could come from a Dutch bank. It's a very international market. It's a complex process because the bank also has to understand all the different contracts and structure their risk in the proper way to, at the end of the day, get their money back. That is what we do in the financing space: connect the project world and the financing world and bring projects to reality that way.
Rivas Gabriel:
Basically, nothing happens without financing.
Joost Samsom: Yeah, exactly.
Rivas Gabriel:
We want to ask you some questions about the energy sector itself, a very important
part of public discourse nowadays, because of global warming. We need to look for alternatives and rich countries are subsidizing in many cases, such initiatives. Is
government aid something you consider when entering a project?
Joost Samsom:
Yeah, absolutely. If we look back 20 years ago, in every country in the world, renewable energy needed to be subsidized, because it was still much more expensive than traditional energy generation. The way this is expressed in the energy sector is by the so called levelized cost of energy. A levelized cost of energy is the price expressed by each kilowatt hour of electricity produced. To calculate that, you use all the costs needed to to build and operate a project, including the return that the investors want to make on their money, an average financial return; and that gives you an impression of how expensive or cheap any specific form of energy generation is on any market in the world. You can imagine that this makes a difference from one country to another because if you have a very sunny country, like Chile, for instance, which is one of the sunniest countries in the world, the levelized cost of energy of solar projects will be much lower there than in the Netherlands, for instance.
If we now fast forward to 2021, we see that less and less countries have a subsidy system, because renewable energy generally has become cheaper, solar modules have become cheaper, windmills have become more efficient. So the levelized cost of energy generally went down a lot. But still you will find big differences from one country to another as by my example between Chile and the Netherlands. So in Chile, solar power and wind power do not need any subsidy at all. And in the Netherlands, offshore wind in the North Sea almost does not need any subsidy either.
But of course, the next challenge for renewable energy is to be available whenever people need it. For example, wind energy or solar energy are typically only available when there's enough wind or when the sun is shining. If you would really want to compare the the levelized cost of energy with gas, then you would have to add some kind of battery storage capacity to be able to supply continuous renewable energy. So this is now the next phase to try to become competitive on a 24/7 basis.
To make a long story short subsidies are still there but, depending on where you go, they are disappearing. In a country like Spain, there are no subsidies for renewable energy anymore and now a lot of solar projects are being built. Still, people start to wonder, okay, but what do we do if the sun goes down? You get big volatility, basically, between day and night. So that's where energy storage comes into play.
Rivas Gabriel:
Yeah, which you're hearing a lot if you follow debates relating to energy or EVs.
Flavia Ginefra (second interviewer):
So we actually had a question regarding sustainability. Do you consider the sustainable part of it? Or do you just think we're focusing on renewable energy? And because you are a company, also profit?
Joost Samsom:
I think that our business, in general, was not very mindful of that until recently. And I think that it depends a little bit from one country to another, how serious this issue is taken.
Increasingly, we see in most countries that if you realize a project, you also have to show what is happening after the useful lifetime of such a project. The business is not so old, so the first big wind parks were built at the end of the 90’s; and typically, they have a useful life of 20 to 25 years. So only now have these old windparks that have reached their end of life and people are starting to wonder what to do with the blades of the wind turbines, which are not at all easy to recycle.
Sometimes we talk to clients about recycled materials, but this has only just started. It depends from one country to another, whether the government also requires you to give very clear evidence of what you will do with the materials afterwards. In some countries, you even have to present financial guarantee in order to safeguard that at the end of the life you will take that project away. But then it is still not sure what will happen with the waste materials. We, as a company, as financial and commercial arranger and a company that helps in structuring, we do give advice to clients about this. At the end of the day though, it's for the client to make sure that they use sustainable products. I think that there's still a big, big way to go in our sector to make sure that materials will be recycled.
Flavia Ginefra:
We wanted to move to your studies, since this is for University of Amsterdam students, and we wanted to know what you studied at university and how it has helped you with your job today and how it shaped you to choose this career?
Joost Samsom: Actually, I studied European Studies at the University of Amsterdam, which used to be a study that combines a language with either economics or law. I did the economics part, which was kind of international economic relations. I combined it with the Italian language and literature, just for fun, basically. So that's kind of how I started. In the course of my studies, I realized that if I wanted to go into the business sector, I would probably need to do some additional, more company related economics, which I did. In those days at the University of Amsterdam, probably that's still the case, you could do all kinds of extra curricular courses to gain additional credits and specialize yourself in some way.
I started to work at a Dutch scientific organization, which is called T&O. It is the National Institute for Applied Science in this country, but more on the business development side. So it had nothing to do with renewable energy. And I think after doing that, for a couple of years, I started thinking about wanting to do something that really contributes to planet earth. That's when I joined Nuon, because they were one of the first ones not only in the Netherlands, but really one of the first companies worldwide to seriously invest in large scale, clean energy projects, which was at the time, mostly wind power, because solar energy was just far too expensive still. You could argue that my studies had almost nothing to do with the clean energy sector. The only thing is that my studies also made me very aware of the international community, notably the European Union. And I've always liked to develop language skills, etc. That gave me the opportunity to join this company who wanted to go abroad and develop wind projects in different countries around the world. I think the university, to that extent, has been important. First of all, to get an academic degree, which is still important for a certain level of jobs. Secondly, mastering a couple of languages, and in the third place, being internationally oriented, not only focused on the Netherlands.
Flavia Ginefra:
Going back to a broader question. Where do you think the renewable energy sector
is going? And do you think there are potential problems that we might encounter?
Joost Samsom: It's very interesting, because I think we are now at a turning point where renewable energy starts to become mainstream. Just a couple of months ago, for the first time in Europe, we had more renewable energy generation than conventional power generation. The real challenge now is to have further integration of renewable energy into the grid. Because I think in most countries, in any case in Europe, with levels of say, maybe 20-25%, wind or solar power, it is definitely not a problem to have that going into the grid, on a relatively volatile basis, given the intermittency of renewable energy. But now, as in many countries, the components of renewable energy in the energy mix gets bigger and bigger. It starts in some places becoming a real problem. How do you handle all that wind power and solar power if you have a really windy day or or sunny day, or maybe even a combination of those two.
Just to give you an example, if in Germany it's really sunny and also windy, there's so much renewable energy power on the grid, that it also flows into the Netherlands and flows into Belgium. And it saturates the grid with a lot of renewable energy - so much that the energy wholesale prices, (the daily energy prices) can go to negative levels, because some projects just to be able to dispatch the energy they have to pay to the energy system rather than receiving money. So, these are real problems, I think that can be solved by proper storage solutions, like batteries or other other means of storing energy. And that is the phase our sector is going into.
I think if you look at the long run, then it's perfectly possible to go to 100% clean energy. By combining all the technologies that we have there, there's no problem whatsoever but it requires a lot of investment. The money needs to be mobilized. It also requires adaptations to our current energy system because our current energy system is very centralized, with just a couple of really big energy plants like a coal plant and a gas plant. And maybe in some countries, your nuclear plants like in France. And that has to shift to a decentralised system with many, many small projects everywhere.
Rivas Gabriel:
Lastly, what would you tell a UvA student who's interested in sustainability or
renewable energy? What would your advice be to get into the sector and be
successful?
Joost Samsom: My advice would be to think really well about what you like to do. Don't think about money. Or where you can make a lot of money and things like that, it’s not so important. Of course, it's important to make a living, but it's more important to really do what you like to do. So think about things like, do I like to be in new technology, for example, which is super exciting. If you love technology and innovation, then focus on that, and maybe join a company or a research institution. On the other hand, if you like to do really concrete things, like building projects, focus maybe the last part of your studies to maybe do an internship at a company who is active in the renewable energy sector and building wind projects or developing solar projects. Try to join such an initiative by doing an internship and seeing really what you like to do. Another alternative is to join a public institution, because you want to be involved in really creating the right landscape for renewable energy to develop. There are many people involved, from public authorities, both local and national, that work in putting in place written policies for renewable energies to grow in the right way. Give it a good thought about what you like and then do what fits your character best.
We would like to extend a big thank you to Joost Samsom for his time. If you would like to know more about him and Voltiq, check out Voltiq’s website!
And a massive thanks from the Green Office go to Flavia Ginefra (left), Rivas Gabriel (right) and the rest of the Alumni Portraits team for continuing to produce such insightful and though provoking interviews!
