Interview with Yves-Maurice Radwan

You have been Head of Green Deal Infrastructure at CR for a few months now. What are your new tasks and which of them do you like best?

In addition to transactions, I am now also responsible for asset management. And that’s precisely what I enjoy – supporting our investments holistically. In addition, we are still in the scaling phase in klimaVest. For me, this means further expanding and optimally aligning this segment – for example, by broadening the product range geographically or weighting new technologies such as battery storage and hydrogen more strongly. The energy market is very dynamic – work never gets boring. 

Can you briefly tell us about your previous professional positions?

I started my professional career in the Commerzbank M&A team in London, then after a short time I moved to William Blair, an American investment bank, and returned to Germany with the opening of the Frankfurt office in 2013. In the following year, I came into contact with renewable energies for the first time via an asset manager, AREAM GmbH.  I was then able to contribute the experience gained in this way to the in-house M&A team of innogy SE. After RWE took over innogy SE’s renewable energy business, I landed up at RWE and joined Commerz Real from there.

What excites you the most about renewable energy?

Renewable energy is the subject of our time – after all, we need to rein in climate change. I am thrilled to be able to make a significant contribution to the energy transition through our work. In addition, renewable energy includes many technologies, all of which have their own special features and allow me to learn something new every day. 

Where do you see potential, but also challenges in the market?

Market growth offers us many opportunities, but also confronts us with special requirements such as strong technical competence and a high level of adaptability. Over the past 20 years, state funding has enabled us to significantly reduce costs, which today allows us to implement projects financially on our own initiative. Due to the discontinuation of the subsidy regime on the market, we are facing new challenges. Where the purchase was previously guaranteed, we now have to sell the electricity on the market ourselves – i.e. deal with price and subsidy volatilities. This requires a rethink and a deeper understanding of the energy market. 

A lot is happening in the world right now. Terms such as “climate crisis” and “Ukraine war” dominate the media. What does this mean for the renewable energy market and, of course, for your work in particular?

It means more uncertainty, less predictability and, above all, higher electricity prices. On the company side, this is increasingly accompanied by the desire to hedge electricity prices in the long term and to decarbonise one’s own profile using green electricity. The environment also offers us the opportunity to draw closer to selected partners and to implement projects jointly in this volatile environment. Of course, despite the positive effects, we hope that the war in Ukraine in particular will soon come to an end and that normality will return to the electricity market.

Are we generally on the right track in Germany? Yes or no – and why?

All in all, yes. The course was set with ambitious goals and the German federal government's Easter package. Nevertheless, there is still room for improvement. For example, the objectives set must be implemented at a local level, which requires approval processes to be simplified and more space to be allocated. In order to support the sustainable expansion in Germany and throughout Europe, the development or strengthening of European supply chains would be helpful.

What are the strengths of CR in the area of renewables?

We have been active on the market for more than 15 years and were already implementing photovoltaic systems in Germany at a time when many market participants were only considering this to be meaningful at sunny locations such as Spain and Italy. We have an edge when it comes to experience, and you can also see that in our team. Many have been there since the beginning – be it in transactions or in asset management. We benefit from this both in terms of acquisitions and operations.

CR is known for its expertise in real estate, how does this fit in with renewable energies?

In principle, both are increasingly interlinked. Renewable energies and sustainable infrastructure are becoming ever more important for the real estate sector – from photovoltaic systems on rooftops to EV charging stations in the garage. Although we deal with such projects on a different scale, we can also contribute our expertise here. In return, we benefit from our long-standing business relationships in the real estate sector, which help us to identify projects or areas for project development.

How do we deal with the fact that technology is developing rapidly in this area in particular? How do we manage to stay on the ball?

We see ourselves as part of the market and attach great importance to regular exchanges with other market participants, including our competitors. In the end, it is not possible to represent and master all technologies meaningfully. The art lies in recognising the most promising technologies and thus an investable business case at an early stage and then positioning yourself in a targeted manner and building up expertise. We don't want to do a little of everything. We want to rather master the technologies in which we invest with all their facets.

Since October 2020, we as CR have also had klimaVest as our first impact fund in the portfolio. What makes this fund so special?

klimaVest already enjoys an excellent reputation on the market and is visible. This means that we are presented with a large number of projects. In combination with our own search activities, we can select the best investment opportunities from a wide range of projects and broadly diversify the portfolio technologically and geographically. In addition, as an Article 9 product, klimaVest is a pioneer in the market for sustainability.

The fund invests directly in renewable energy plants, i.e. primarily in large and professional wind energy and photovoltaic systems. How do you select the investments, what do you consider important?

Many factors play a role in the evaluation of a project. We attach great importance to experienced project partners and service providers as well as, of course, high-quality technical components. The combination is the key to success. If excellent components are not optimally installed, the long-term performance of a plant cannot be ensured. In addition, it is particularly important for us not to evaluate projects on our own. Of course, every project must, in itself, be economically viable, but the combination of projects in the portfolio and the associated diversification are what we focus on.

Does the electricity from the klimaVest investments flow directly into our electricity grid? Can I order it? Or, to put it another way: how does the electricity reach the consumer and how do the electricity costs ultimately reach klimaVest and the investors?

All our projects feed into the respective local power grids. The electricity is then delivered to where it is needed via the respective distribution and transmission system operators. In Germany, for example, certificates of origin are used to identify green electricity. In order to obtain this directly from our investments, we would theoretically have to be connected directly via a cable and a “physical” power purchase agreement would have to be concluded with us. Although this is possible in practice, it is rarely the case with large commercial systems. In simple terms, you can't simply buy the electricity from our investments if you are a private household. We sell our electricity via the exchange or to electricity dealers, who then resell the electricity to households and companies.

What is your vision or goal, where do you want to go with CR?

First of all, we want to further expand our core portfolio, consisting of solar and wind power projects, and create a solid, geographically diversified basis. To this end, we want to broaden our technological reach and thus further strengthen the risk-return profile of klimaVest.

What else will happen in the area of renewable energy (new technology, etc.)?

As the production profile of renewable energy can be very volatile, it often does not correspond to the demand profile. Also, supply and demand can differ geographically (e.g. German north-south divide), meaning that power grids are under heavy strain. This requires significant expansion of the grid infrastructure and battery storage projects that can serve as a buffer for the grids. Both topics are very interesting and will also play a role for klimaVest in the future. In addition, new applications and further developments in photovoltaics and wind offer attractive potential. These include agrivoltaics, the simultaneous use of land for agriculture and PV electricity production, as well as floating PV and wind farms.

Climb up the wind turbine yourself or stay on the ground?
Go up, but only in an elevator.

Real life or virtual walkabouts of assets?
I’m not a technician, so the added value I’d bring to a walkabout is negligible, but basically real life.

Wind or solar?
Solar.

Finland or Sweden?
Sweden.

Train or plane?
Since we do a lot of business abroad, we often cannot avoid flights. But otherwise, I like to travel by train. If there is one...

Private green electricity or cheap tariff?
Green electricity.