Mike Lambros first launched his career as an analyst, but the subprime crisis of 2007 and 2008 and its effects on the real estate private equity sector served as the impetus for him to embark on a new entrepreneurial venture that now sees him developing renewable energy projects in the solar market.
Coinciding with his desire to switch gears and work to create a sustainable future for the planet, Lambros cites the tremendous growth of the market, which elicited the interest of investors and a proliferation of global subsidies to match.
“I was presented with the opportunity to use my skill set learned in investment banking and private equity to close interesting deals in this promising new industry, which was only at the tip of the iceberg,” he recalls.
Since that time, the London-based Director of Emel Solar Limited says that as renewable energy is no longer dependent on government subsidies, costs have dropped tremendously. “In many markets, solar and wind projects offer a lower, leveled cost of electricity than conventional energy generation projects such as coal or combined-cycle gas plants,” he says. Lambros also predicts that the “explosion of capital” that renewable energy is commanding will continue to grow exponentially in the coming decades in order for governments and corporations to achieve their targets for CO2 emissions.
To find out more, we recently spoke with Lambros about how he applied his McIntire background in his current line of work, the challenges he faces in his sustainable business, and the opportunities he sees on the horizon.
How has your Commerce School education informed the work you’ve been doing in renewable energy?
My work within renewable energy is centered on project finance and commercial law, two topics we covered intensely as part of the Comm School curriculum. I built my first financial model as part of my “GDP” project, and this gave me a good base to hit the ground running when I first got into investment banking. To this day, I still build financial models for most solar and renewable energy projects I get involved with. I am also highly engaged with attorneys in drafting and negotiating project documents such as share purchase agreements; nondisclosure agreements; loan agreements; engineering, procurement, and construction contracts; operations and maintenance (O&M) agreements, etc.
Can you give an overview of the kind of work you do on a day-in, day-out basis? How much of your work remains financial versus direct consideration of renewable energy issues or projects?
As I mentioned, much of my daily work is focused on the financial and legal side of the development of solar and other renewable energy projects. Much of my time is spent either on the phone or in meetings, either to discuss issues with projects as part of an existing engagement, or pitching potential new clients on the financing of new projects. A lot of time is spent on conference calls with lawyers to review and comment on the latest project agreements. For new engagements, much time is spent building financial models and offering memorandums that help market projects available for sale or co-investment. If we are engaged in a sale advisory role, we send teasers and O&Ms to our network and manage the offering process, receiving offers and helping the client sift through and negotiate these offers.
What are some specific challenges to your work that are unique to renewable energy in the UK?
Renewable energy has been dependent on government subsidies to support the financing of new projects. These government subsidies were often changed, which hugely disrupted the potential to develop new projects in specific markets. That meant that in order to be successful in the solar industry, you had to be nimble and able to navigate from market to market, depending on which markets are hot. When the UK government first announced its incentive scheme for solar, the market became very hot, but it all came to a halt when the UK government eliminated its subsidies. This has caused me to focus on new emerging markets such as Spain, Italy, Greece, the United States, Africa, and Southeast Asia.
I understand that your company, Emel Solar Limited, has been developing a project in Arizona. Can you explain it and your hopes for its use?
Emel Solar has partnered with landowners in the Mojave Desert in Arizona to develop a 600-megawatt power solar and 240-megawatt battery project that will wheel power into Southern California once constructed. Our hopes are to contribute the project rights to a partnership with an investor, who will fund the full construction and sign a power purchase agreement with an electricity offtaker. The project is progressing well, and we are very excited to part of such an interesting development in the region.
What do you see as the greatest upcoming opportunities in the energy or environmental fields that people aren’t—but should be—talking about?
One of the biggest opportunities in the energy field is the introduction of energy storage solutions that will help stabilize grids and help power producers more effectively match supply with demand. There is a big opportunity in new technologies that can help grid administrators better analyze and manage the complex power demand and supply cycles, which becomes much more complex with the introduction of renewable energy projects such as solar and wind, which have intermittent production schedules. Electric vehicles (EVs) should also be able to play an integral role in grid maintenance and stability, by having the ability to draw power from their batteries, which are charging and plugged into the network. As EVs become more popular, this will create a huge new demand for electricity.