Ex-Tesla Executive Decamps to Brazil and Bets Big on Batteries

Laura Millan Lombrana
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Ex-Tesla Executive Decamps to Brazil and Bets Big on Batteries

(Bloomberg) -- Marco Krapels left Tesla Inc. and started a battery company in a place that’s a hemisphere away from California’s rarefied clean-energy scene: Brazil.

Krapels, Tesla’s former vice president for international expansion of solar and storage, now runs Sao Paulo-based MicroPower-Comerc. The company, backed by Siemens AG, is pushing to use big mobile batteries to wean Latin America’s largest economy off oil-fired generators during blackouts.

It won’t be easy. Brazil offers almost no government subsidies for renewable energy and imposes stiff import taxes. The nation’s market for big batteries, meanwhile, is hardly existent. Nonetheless, Krapels sees opportunity in a place with an occasionally unstable power grid and a robust market for wind and solar.

“This is not for the faint of heart, but I think there’s an advantage on being the first to move into a market,” Krapels said by phone.

Much of Brazil’s power sector is already carbon-free, with about two-thirds of electricity coming from hydropower. Developers have also aggressively developed wind farms in recent years, including in the breeze-rich region of Serra Branca. But businesses regularly turn to diesel generators during blackouts that are endemic in some areas.

Krapels began exploring the potential for batteries in Brazil when he worked for SolarCity, which Tesla acquired in 2016. He wanted a large market with an unreliable power system and no significant government subsidies, which force companies to depend on political cycles. Brazil checked all those boxes.

MicroPower, founded last year, offers to deliver on-site lithium-ion storage systems to big-box stores, hotels and other large commercial and industrial customers to use instead of diesel when lights go dark. The systems, which MicroPower owns and maintains, also allow customers to save money by storing up electricity at night when it’s cheap, then using it during the day when prices spike. The company has installed pilot systems at a Coca-Cola bottling plant and a McDonald’s restaurant.

Comerc Energia, a Sao Paulo-based energy trading and management company, took an undisclosed stake in the company about 18 months ago. In July, Siemens’s investment arm took a 20% stake.

One of MicroPower’s primary challenges is navigating Brazil’s complex tax and regulatory structure. The company doesn’t manufacture its systems, and Brazil’s import taxes tack on about 65% to its battery costs. To get around that issue, MicroPower is exploring buying battery components abroad and assembling them in Brazil, said Peter Conklin, a former SunEdison Inc. executive who co-founded MicroPower and is its chief operating officer.

BloombergNEF expects cumulative global battery storage capacity to soar from 29.4 gigawatt-hours this year to 710.6 gigawatt-hours in 2029. The amount of storage in Brazil, however, is negligible, according to BNEF. While investors have begun to take interest in the market, storage companies have not gained much traction.

“Intuitively it sounds quite attractive to combine resiliency with economic advantage within the commercial and industrial segment,” BNEF analyst Logan Goldie-Scot said. “But in practice that’s been quite hard to get off the ground.”

To contact the reporter on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net

To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Ryan, Pratish Narayanan

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