5 min

Interview With YPF Luz’s CEO, Martin Mandarano

AN EXCLUSIVE INTERVIEW WITH:

Could you share details about the innovative projects YPF Luz is currently involved in?

Looking to the future, we started to study the potential of green hydrogen produced from renewable energy and CO2 capture in thermal power plants. Today, the prices of hydrogen produced from clean energy are not competitive anywhere in the world. Given Argentina’s resources, it represents a huge potential. Today it is expensive compared to other fuels, but we believe that with technological developments in the short term we will be able to explore its full potential.

On the other hand, the capture of CO2 from thermal power plants would make it possible to generate energy on a constant basis without impacting the environment. This is an issue that we are following closely in order to be pioneers, taking advantage of the natural gas opportunities that Argentina has in Vaca Muerta.

In terms of assets, earlier this year we began construction of our fourth wind farm, located in General Levalle, Córdoba. With an estimated investment of USD 260 million, construction will take almost two years to complete. The project is divided in two: on the one hand, the “General Levalle I Wind Farm” which will have 10 generation turbines (wind turbines) that will deliver a maximum power of 62MW; and on the other hand, the “General Levalle II Wind Farm” with 15 generation turbines and a maximum power of 93MW. In total, the Park will have an installed power of 155 MW, equivalent to the consumption of more than 190,000 homes.

The technology selected for its development is from Vestas, whose technology is installed in our Manantiales Behr wind farm, one of the most productive in the world, which exceeds its capacity factor every year. The model to be installed in General Levalle is of a size and power unprecedented in Latin America.

How does YPF Luz integrate new technologies to improve energy efficiency and achieve its long-term sustainability goals?

At YPF Luz we have the vision of being one of the main companies in the electricity generation sector, a leader in renewable energies, with safety, technology, efficiency and quality standards of world reference. Today, we are the main generator in the Renewable Energy Term Market (MATER) with a market share of 36%.

At the same time, we continue to work on the incorporation of technology to constantly improve all the processes of our operations throughout the country and to become more efficient and sustainable every day.

We seek to lead Argentina’s energy transformation, developing the full potential of natural resources to supply more energy to the whole country, supporting the global trend of making a transition to clean energy through new technologies such as green hydrogen, electric mobility, among others.

We are going through a global energy paradigm shift that started a few years ago. And this energy paradigm is moving towards an increasingly decarbonised path. The energy transition is based on the premise of replacing traditional energies with clean energies, making more efficient use of current resources and capacities.

In the framework of the commitment to sustainability, what are the long-term objectives of the YPF Luz’s deadline to reduce its environmental footprint and promote sustainable practices throughout the value chain?

YPF Luz’s sustainability strategy is transversal to the company’s objectives. Working with a focus on sustainability allows us to contribute to our surroundings and achieve our business objectives. This translates into doing business with a triple impact: creating economic value, with a social perspective and having a positive impact on the environment.

We understand sustainability as a way of working that drives us towards constant, long-term growth. YPF Luz has set a target of an 8% reduction in GHG Emissions Intensity by 2025 vs. 2020.

Responsible value chain management is a fundamental aspect of sustainability. We are aware of the environmental, social, integrity and governance impacts and risks in our value chain and work together with third parties and suppliers to minimize risks and improve best practices.

At YPF Luz, we constantly deal with environmental, safety and compliance issues. Through this area, we provide training to suppliers with a special focus on the Code of Ethics and Conduct, i.e. Law 27.401 and on YPF Luz’s Compliance policies. At this point, we also include our customers to continue advancing in training with our related third partners.

Could you detail some of the key projects in the development of installed capacity with efficient and renewable thermal generation, and how these will contribute to the diversification of the energy matrix in Argentina?

This year we celebrate our first 10 years. A decade producing profitable, efficient and sustainable electricity; and reaffirming our commitment to the development of the country and the progress of the energy transition. We have reached this anniversary as a benchmark in renewable energy generation and fourth in the ranking of electricity producers from all sources; this motivates us to continue growing more and more, because we understand that this accompanies growth and development for the country.

The company has reached an installed capacity of 3.2 GW, supplying the wholesale market and Argentinean industries.

In thermal power generation, we focus on incorporating assets that make efficient use of gas, as it is the fossil fuel with the least impact on the environment for electricity generation.

As far as renewable energies are concerned, we are committed to developing them in a reliable, efficient and sustainable manner, with first-class technology, so that industries can incorporate this CO2 emission-free resource.

We have one solar farm and three wind farms to supply renewable energy to the country’s main companies. Manantiales Behr, located in Manantiales Behr, Chubut province, has an installed capacity of 99MW and 30 wind turbines of 3.3 MW each. Los Teros, located in Azul, Buenos Aires province, has an installed capacity of 175MW and 45 wind turbines. Finally, Cañadón León is located in the town of Cañadón Seco, Santa Cruz. It has 29 wind turbines of 4.23 MW each and an installed capacity of 123 MW. We are currently building our fourth wind farm of 155 MW in the province of Cordoba.

In this way, we reinforce our federal presence with operations and projects in 7 provinces of the country and our commitment to continue diversifying the national energy matrix.

How does YPF Luz seek to establish strategic alliances to foster innovation technology in the energy industry?

Argentina has enormous potential in terms of natural resources, necessary for the generation of renewable energy and new energies associated with the energy transition: it is in our hands to turn these resources into wealth.

This represents great value for companies looking to establish strategic alliances, and for us it is an opportunity to make Argentina’s energy industry grow and become more competitive globally.

A few weeks ago, together with YPF S.A., we signed an MOU with Posco, one of the world’s leading Korean steel producers. The agreement, concluded within the framework of the H2 MEET in Korea, is framed as a “Green Hydrogen Business Cooperation“, which includes the opportunity to explore the development of renewable energies and investments in our country -such as a green hydrogen production plant- with export possibilities. It is the beginning of a joint cooperation to evaluate plans and exchange knowledge regarding innovation for hydrogen and green ammonia generation, operational excellence and reduction of environmental impact.

In terms of current projects, how does YPF Luz ensure that its initiatives are not only environmentally sustainable, but that they also have a positive social impact on the communities in which they operate?

At YPF Luz we are committed to the sustainable development of the communities where we operate. Undoubtedly, reporting our actions on these three ESG axes has a direct impact on the transparency and trust we convey to our stakeholders and shows our commitment to sustainable management. It is our way of demonstrating our achievements, our progress and our challenges. In this way, we can obtain feedback on our management and provide motivation on issues relevant to our employees, our value chain, the communities where we operate and society.

Since 2018 we have had a Social Investment Plan aimed at promoting activities that stimulate social and environmental commitment in the communities in which we are present with our operations; we also have the commitment of our employees who contribute through volunteering activities.

Our Social Investment Plan is based on 4 pillars: improving the quality of life and infrastructure of the communities where we operate; contributing to improving the quality of education; promoting the development and dissemination of knowledge to benefit society, with a particular focus on the efficient use of energy and renewable energies; collaborating with professional, business and community associations, whose efforts can complement YPF LUZ’s operations and allow us to improve service to the public.

Through the Plan, we seek to foster open and fluid dialogue with our communities to identify the impacts resulting from the Company’s activities, to deal with inquiries and complains, and contribute with activities that are relevant to the community and our employees. The activities are focused on promoting education, energy efficiency and environmental improvement. In 2022, we will reach 25,000 beneficiaries, with 36% of the company participating, reaching 574 volunteer hours, 73% more than in 2021.

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