Amancio Ortega--Spanish Billionaire to Create a Global Alternative Energy Network
From the high street to high winds: Zara boss bids to power the world
By Elizabeth Nash in Madrid
Monday, 1 December 2008
The self-effacing billionaire boss of Spain's Intidex textile empire, Amancio Ortega, who founded the Zara fashion chain, is taking a dramatic change of direction by creating a global alternative energy network.
As he did when he founded Zara over 30 years ago from his sister's kitchen table in La Coruna, Mr Ortega, Spain's richest man is launching his new venture modestly in his home region of Galicia, north-west Spain. But his ambitions are boundless and he has already established energy bridgeheads in three continents.
As chairman and chief shareholder of his company Capital Energy, Mr Ortega has produced a clutch of projects prompted by a tender offered by Galicia's regional ministry for innovation and industry, to provide up to 2,323 megawatts of energy from alternative sources, and set up some 20 energy parks. Mr Ortega reportedly intends to invest more than €2bn (£1.65bn) in his new venture over the next 18 months, with plans that extend far beyond Spain.
The move into renewable energy marks a dramatic turning point for the man who built a €30bn fortune by persuading Spanish women to love the beige trouser suit. His fashion revolution caught the mood of a nation emerging from dictatorship, whose young women relished new-found freedoms. His formula of low-cost high-fashion conquered the world and continues to grow. A Zara shop, or one of its offspring, opens somewhere in the world every day and a half.
But after depositing chunks of his hefty fortune in research foundations, real estate and banking in recent years, Mr Ortega has now hit on renewable energy production on a world scale as the next big thing. One of the keys to Zara's success was the company's control of every step of production, from design, manufacture and distribution, to sales. It is a pattern set to repeat itself.
Next year, he plans to start building eolic parks, or wind farms, including those at sea, plants for the production of biofuels, and solar and photovoltaic energy plants. "Our plans cover development of projects from the outset. We will not be buying companies in operation, as often happens in the sector," says Jose Espinosa, Capital Energy's director of Strategy and Corporate Development.
As a country without coal, oil or gas, Spain has been keen to develop alternative energy sources, and solar panels and wind farms are a common sight. But such projects are mostly small-scale sidelines operated by Spain's huge energy conglomerates whose main interest is distributing imported fuels.
Recent interest shown in the Spanish energy company Repsol by the Russian energy giants Gazprom and Lukoil has brought home to Spaniards how politically vulnerable they may become to possible political pressure through their energy dependency. Mr Ortega's plans are well-laid, but their revelation yesterday, albeit low-key, in the Galician regional press, suggests that in energy, as in fashion, he is ahead of the curve.
Over the past year, Capital Energy has set up photovoltaic plants in the sunbaked Castilla-La Mancha region, and around Madrid, and is to erect wind farms across Spain in coming months. Mr Ortega has created 10 subsidiaries of Capital Energy to handle the energy produced, according to its source – biofuels, solar, wind – to take full advantage of subsidies for alternative energy. Capital Energy has already established a presence in Latin America, East Europe and India. But the plan is to draw in private capital to the tune of €100m in an operation masterminded Europe-wide by the private bank Edmond de Rothschild Europe. The aim, Capital says, is to expand throughout Spain and abroad. "Our immediate plans are to build 80 megawatt windmills, then 100 megawatt photovoltaic energy panels, and five thermosolar plants," Mr Espinosa says. "That will cost €300m to set up. In four or five years all will be in operation."
Projects include four biofuel plants using soya, rape seed and palm fibre planned for Seville, Bilbao, Cartagena, and Cadiz, to produce up to 250,000 tons a year; seven photovoltaic solar plants are being built, which will produce 0.7 megawatts. Bigger ones will be built in 2010, in Castilla-Leon, north of Madrid, and Catalonia. Wind generators of more than 2,000 megawatts will start going up next year, as plans are advanced for marine windfarms. Top of the list, where the enterprise was thought up, is wind-lashed Galicia.
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Wish Boone were doing something like this, incorporating the best solutions for a given situation.
By Elizabeth Nash in Madrid
Monday, 1 December 2008
The self-effacing billionaire boss of Spain's Intidex textile empire, Amancio Ortega, who founded the Zara fashion chain, is taking a dramatic change of direction by creating a global alternative energy network.
As he did when he founded Zara over 30 years ago from his sister's kitchen table in La Coruna, Mr Ortega, Spain's richest man is launching his new venture modestly in his home region of Galicia, north-west Spain. But his ambitions are boundless and he has already established energy bridgeheads in three continents.
As chairman and chief shareholder of his company Capital Energy, Mr Ortega has produced a clutch of projects prompted by a tender offered by Galicia's regional ministry for innovation and industry, to provide up to 2,323 megawatts of energy from alternative sources, and set up some 20 energy parks. Mr Ortega reportedly intends to invest more than €2bn (£1.65bn) in his new venture over the next 18 months, with plans that extend far beyond Spain.
The move into renewable energy marks a dramatic turning point for the man who built a €30bn fortune by persuading Spanish women to love the beige trouser suit. His fashion revolution caught the mood of a nation emerging from dictatorship, whose young women relished new-found freedoms. His formula of low-cost high-fashion conquered the world and continues to grow. A Zara shop, or one of its offspring, opens somewhere in the world every day and a half.
But after depositing chunks of his hefty fortune in research foundations, real estate and banking in recent years, Mr Ortega has now hit on renewable energy production on a world scale as the next big thing. One of the keys to Zara's success was the company's control of every step of production, from design, manufacture and distribution, to sales. It is a pattern set to repeat itself.
Next year, he plans to start building eolic parks, or wind farms, including those at sea, plants for the production of biofuels, and solar and photovoltaic energy plants. "Our plans cover development of projects from the outset. We will not be buying companies in operation, as often happens in the sector," says Jose Espinosa, Capital Energy's director of Strategy and Corporate Development.
As a country without coal, oil or gas, Spain has been keen to develop alternative energy sources, and solar panels and wind farms are a common sight. But such projects are mostly small-scale sidelines operated by Spain's huge energy conglomerates whose main interest is distributing imported fuels.
Recent interest shown in the Spanish energy company Repsol by the Russian energy giants Gazprom and Lukoil has brought home to Spaniards how politically vulnerable they may become to possible political pressure through their energy dependency. Mr Ortega's plans are well-laid, but their revelation yesterday, albeit low-key, in the Galician regional press, suggests that in energy, as in fashion, he is ahead of the curve.
Over the past year, Capital Energy has set up photovoltaic plants in the sunbaked Castilla-La Mancha region, and around Madrid, and is to erect wind farms across Spain in coming months. Mr Ortega has created 10 subsidiaries of Capital Energy to handle the energy produced, according to its source – biofuels, solar, wind – to take full advantage of subsidies for alternative energy. Capital Energy has already established a presence in Latin America, East Europe and India. But the plan is to draw in private capital to the tune of €100m in an operation masterminded Europe-wide by the private bank Edmond de Rothschild Europe. The aim, Capital says, is to expand throughout Spain and abroad. "Our immediate plans are to build 80 megawatt windmills, then 100 megawatt photovoltaic energy panels, and five thermosolar plants," Mr Espinosa says. "That will cost €300m to set up. In four or five years all will be in operation."
Projects include four biofuel plants using soya, rape seed and palm fibre planned for Seville, Bilbao, Cartagena, and Cadiz, to produce up to 250,000 tons a year; seven photovoltaic solar plants are being built, which will produce 0.7 megawatts. Bigger ones will be built in 2010, in Castilla-Leon, north of Madrid, and Catalonia. Wind generators of more than 2,000 megawatts will start going up next year, as plans are advanced for marine windfarms. Top of the list, where the enterprise was thought up, is wind-lashed Galicia.
================
Wish Boone were doing something like this, incorporating the best solutions for a given situation.
Replies to This Discussion
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Permalink Reply by Clynton on -
Yeah, Boone or other American billionares. Maybe all the hype about how many we have is wrong, 'cause I don't see 'em doing anything.
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Permalink Reply by Luane Todd on -
No, my friend, the hype is not wrong. The difference is the mind set of so many of our wealthy--I've Got Mine, You're On Your Own--YOYO for short. The difference between Mr. Ortega and so many of our homegrown rich people is that he seems to understand the need to help his country solve a problem and he is willing to put his money where his responsibilities lie.
A long piece, but worth the effort, I think.
www.odemagazine.com
Noreena Hertz | December 2008 issue
Death of a paradigm
Countries must be given the freedom to determine their economic policies to meet their own needs, argues Noreena Hertz.
Photo: Chris Saunders
We’re witnessing the death of a paradigm. As is usual at moments of mourning, such a claim is met by denial, resistance and anger from the initiators and defenders of the old faith.
But it would be parochial to think recent events just expose microflaws in the banking system and the outcome will be a tinkering with the financial system and that’s that. The dominant economic theory of the past 20 years, a theory that put liberty before equity, gave markets more power than states and saw risk as a public good that shouldn’t be restrained, is defunct. The system that not only condoned but encouraged excessive greed, the laissez-faire capitalism embraced by the U.S. and the U.K. some 20 years ago, and foisted on the poorest countries of the world by the World Bank and International Monetary Fund, has had its day. The public won’t tolerate resuscitating it.
To be clear, this doesn’t mean all versions of capitalism are redundant. It was part of the hubris of the Washington hegemony that its capitalism was the only capitalism. But capitalism has always existed in substantially different forms. The continental European form differs from the Asian, which differs from the Swedish, and so on. The differences largely depend on the extent to which a country values the state, wealth redistribution, community, culture and non-monetary measures of success. It’s only the Anglo-American “end of history” type of capitalism, a philosophy that actively discarded these other factors and decoupled the economy from social justice, that must soon be buried.
For the paradigm was inherently dishonest, built on promises that could never be fulfilled. In the past few months, its various disconnects have begun to be publicly revealed: disconnects between the real money that circulates in our economies and the Monopoly money that circulates in the financial realm; disconnects between what we physically own and what we can afford to own; disconnects between risk and reward, two things the paradigm itself supposedly traded off against each other but in recent years became perfectly correlated; disconnects tangibly manifest in unintelligible bank balance sheets, in unprecedented levels of personal debt and in hedge fund bosses earning billions annually.
Up until now, the challenge to the hegemonic position was confined to a group of thinkers, myself included, who saw the writing on the wall and published to that effect, and a handful of national politicians who were determinedly vocal in their concerns. But although we dissenters did have significant audiences, our views were never seen as mainstream, because the supporters of the hegemonic paradigm were the global business elite, the dominant economic, financial and business media and the U.S.
This will change. Now that the cracks are so clear, now that people’s jobs are in peril, in the U.K. and U.S., unemployment is rising at meteoric rates, now that the loan pushers are calling their loans in, now that we don’t have money to shop and we witness our wealth collapsing, the public is getting angry, and not just at bankers. We’re seeing a fundamental outrage at the whole interconnected mess of a system: at energy companies that record massive profits yet allow pensioners to struggle to stay warm in winter; at CEOs who can earn up to 1,000 times the salary of their average worker; and soon, any day now, at those politicians who allowed this to happen, at all those who allowed such a fundamental disconnect between how these politicos portrayed the world and how we’re now collectively experiencing it.
The public recognizes that it has the moral right and authority to damn the ideology that resulted in this. This is a fundamental change. Smart politicians will recognize this tectonic shift, this change in the balance of power from high finance and big corporations to the people, and will seek to build political capital from it. We’re all socialists now, what with mainstream politicians from left and right criticizing bankers’ irresponsible behavior and salaries, and calling for state intervention in the financial markets.
But these calls won’t get them elected if they’re addressed only in the banking sector. For the financial crisis is a manifestation of a fundamentally flawed way of thinking about the world, a flawed way of thinking that’s going to hurt real people increasingly over the next couple of years as the world enters a recession. And it will hurt not only people in countries that preached the paradigm, but those in countries that didn’t. Job cuts, shrinking growth forecasts, tumbling stock markets are already being seen in Rio de Janeiro, Bogotá, Beijing and Moscow. The poorest countries will experience the double whammy of having had to deregulate, privatize and open up their markets to be eligible for aid and seeing those pledges go unmet.
This is the first full crisis of globalization, a recognition that in a tightly interconnected world, one country’s troubles fast become each and every country’s troubles, the first collective “lose-lose” situation. That means the smartest politicians will be those who aren’t only willing to differentiate themselves from the laissez-faire past, but who are willing to engage in a transparent exchange of ideas about what kind of world, what kind of society, we want. The smartest politicians will be those who come willing to reconstruct and, if necessary, dismantle their prior assumptions, and are open-minded about which thinkers, ideas, theories to embrace and which to reject. The smartest politicians will be those who understand, and are explicit in stating, that when the facts stop fitting the world view, they have to recreate the world view, not recreate the facts.
And in that process, they can and must draw lessons from the past 20 years. No more “one size fits all” economic prescriptions. Countries must be given the freedom to determine their economic policies to meet their own needs. No more domineering, romanticized policy of deregulation. The perils of weak or non-existent regulation are all too clear. Any industry that potentially harms the public good must be fair game to regulate, with teeth. And the myth that “a rising tide lifts all boats,” at the old ideology’s core, must finally be jettisoned. For it was never true. Social mobility in the U.K. has barely improved in 40 years. In the U.S., a quarter of the country’s wealth is in the hands of just 14,000 families. It’s time to put in place policies that will ensure that upside gain, not only downside risk, is shared.
The next phase of capitalism, properly configured, will forsake catchy slogans and neat economic models for the complex nuances our multi-polar world demands. It will mix policies of localization with an understanding that those problems that owe to our interconnectedness, like CO2 emissions, will necessitate global solutions and can’t be tackled alone. And it will actively seek to redefine what’s valuable, so children growing up today don’t make the mistake our generation made of confusing success with the ability to purchase another pair of Nikes or a Gucci bag.
The old paradigm may be dying. But let us not mourn and instead have hope. For if from its ashes something significantly different, better and wiser emerges, then however hard the immediate future may be, the current economic suffering will not be in vain but for our collective greater good.
© Ode Magazine USA, Inc. and Ode Luxembourg 2008 (further information in Privacy & Copyright)
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Permalink Reply by Leslie G. on -
Luane, your article caught my attention since my grandparents were from Galicia, Spain.
Below is a short article you might like to read.
Here’s a list of the top 5 formerly environmentally oblivious business execs who’ve changed their tune for the greener.
From Egregiuos to Green: 5 CEO's Who Made an Environmental U-Turn
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Permalink Reply by Luane Todd on
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A yes, Treehugger. I can spend all day following their articles and still not get to the end.
I have had the pleasure of listening to Ray Anderson in Kansas a couple of years ago at the Land Institute. He is also featured regularly at Bioneers events. He seems to be the real thing. Branson fascinates me..he was running a prize competition which I have not checked back on in a while to reward anyone or several anyones who could develop a world changing alternative carbon reducing lifestyle. (I don't have that quite right but I will try to find the exact form in my files) I saw him on PBS a year or so ago and he was impressive in his commitment.
Thanks for the Treehugger reminder.
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Permalink Reply by neil cox on -
The above has a lot of fancy words, some with non-specific meanings, such as parochial and paradigm. I agree: we need to beware of entangling foreign alliances, and think local. We should conclude that very large is bad, especially our very large and invasive Federal government. Any ideas how to get from what we have to anything that might be better? We need specific details instead of generalities. My guess is the progressives, environmentalists, internationalists, main stream media and liberals have it all wrong. Libertarians have some good ideas, but the rich and powerful must be keep from the excesses by means other than law suits. Lawyers are corrupt, so we can not expect them to favor the poor and middle class. Neil
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Permalink Reply by Marvin Keith on -
Good answer Neil. You are too easy on those "progressive" recessives who would have us return to failed systems of the past. The true cause of the economic meltdown is a severely biased media which has foregone its investigative responsibilities which if intact would have loudly trumpeted the foolhardy real estate financing schemes and their securitizing bedfellow which inflated the bubble til it burst wounding most of us with the fiducuary shrapnel still orbiting the banks balance sheets and our neighborhoods. The failure of AIG to back its insurance products with the required capital to protect its clients remains an unrevenged savagery while their salesmen were bonused from the TARP funds in an immensely insane irony. BTW, Lawyers are not corrupt, they are venal, as is the law, which was written by politicians who are corrupt by virtue (?) of there desire to stay in office which is demonstrated by their etc, etc, etc. Democracies must fail because people are animals motivated by self interest. Constitutional Republics survive until the people forget that such government is the only known method to equitably share liberty and maximize happiness. Life is assumed.
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Permalink Reply by Mike Johnston on -
We are all responsible for ourselves in the end. While it is nice for someone to lead on big projects and to take the national or world stage it is still necessary for everyone to be involved.
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Permalink Reply by Pedro Daniel Trigos on -
god day my fellow a long distance from buenos aires - argentina - my apologies about my pour britihs language but if you prefer spanish I agree...
repeat god morning USA fellows T.Boone pickens plan a great idwea
please read my site abot my propoust
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Permalink Reply by Mike Johnston on
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The first thing we need to do is establish a national legal framework within the green energy economy can evolve. This is what pickens along with the center for American progress is doing now. Establishing that franework requires public support which is what the pickens army is doing. Spain is way ahead of us on those two fronts
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Permalink Reply by Pedro Daniel Trigos on
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i don´t have any idea about spain or eeuu my job , step by step , at Carmen de PATAGONES SOUTH ARGENTINE LANDS
WHEN PROTOTYPE BORN WITH CLAIRE RESULTS, THAT MY REALITY CONTRIBUTION IN ALTERNATIVE RESOURCES.
EOLIC ENERGY SYSTEM TORNADO. ABOUT 1.5 MEGA WATTS BY ONE. WITH LOW COST AND QUICLY RETURN INVERTION. 4 YEARS.ONLY.WE PAY THIS PROYECT WITH OWER MONEY. DOLLAR BY DOLLAR ONE BY ONE...AND THAT IT IS NOT A FEW DOLLAR´S...NO MY FELLOW...CERTLY NO...
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Permalink Reply by Auntie Tutu on -
Shucks, tooo bad Spain o wns the sun and has a controlling interest in the wind. Otherwise we could do that kind of thing in America. Luckilly, though, we can dig for oil just off our white sand beaches on our three coasts, and go on clobbering middle east nations to make sure they sell us their oil. If it ain't broke don't fix it. I think change is all bad. And solar panels are ugly, so we shouldnt have them. I like recessed incandescent lighting, and I think more peopel should move to the sunbelt so they can require more air conditioning, which creates jobs.
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Permalink Reply by SJC on -
Sarcasm aside, the renewable energy front still has the "tree hugger" label. Once green is just the way of doing things and no one would even consider doing anything any other way, then we will have arrived. The U.S. is incredibly wasteful. I call it the Wealthy Enough to be Wasteful factor. Once we get over that, we will be on our way.
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