Energy producer BEE is ready for the next phase of growth: “I would really like to be positively challenged”

Belgian Eco Energy wants to quickly build a second and third biomass plant. To do so, it is looking for additional capital, through private equity, a family office or some other avenue. “Apart from Ecopower, we are the only fully Belgian energy supplier and producer, but we have faced many challenges. Now, things look a lot better, and we want to continue our momentum."

“A second heating plant could be built there. And we would like to have two wind turbines on the site, possibly also a solar panel park.”

Those who get a tour from Michaël Corten and Vicky Buyse, CEO and COO of Belgian Eco Energy (BEE), will also get the energy producer's further growth plans on top. Exactly one year ago, the Bio Energy Base opened its doors here. The heat plant is located on the site of the old coal terminal in the port of Ghent, where the production of this fossil fuel will be completely replaced in the coming years by green electricity based on non-recyclable wood. The biomass is converted into electricity, steam and heat, and power. BEE, which focuses exclusively on the B2B market, includes the Chimay brewery, data centre group LCL and construction group Aertssen among its customers.
You would think everyone would be happy with the circular renewable energy model, but nothing could be further from the truth. In 2016, a subsidy of 1.5 billion euros for the construction of the biomass plant caused the then Flemish Minister of Energy, Annemie Turtelboom (Open VLD), to be escorted to the exit by the firm hand of party chairwoman, Gwendolyn Rutten. The subsidy was withdrawn, and the current plant is a much slimmed-down and completely revised version of the original model that was supposed to be the largest in the world.

How about the growth plans?
MICHAËL CORTEN. “In addition to a second plant here in Ghent, we are also looking at locations in Wallonia. We also want to explore the possibilities in France or Spain. Talks are also ongoing with delegations from Namibia and India. There is a gigantic energy demand worldwide, partly due to the electrification race. Our model is very attractive, because the plant can operate on wood, household and industrial waste. But we also have to be realistic. We are still relatively small, so we are looking for a local partner for our foreign adventures.”

The port also needs a lot of energy. They are probably very happy with your presence.
CORTEN. “The energy issue is a serious challenge for a lot of port companies. BEE is currently in a unique position because we can also maximise the use of heat and steam from the plant. We are now at an advanced phase of being able to conclude steam and heat contracts with the nearby companies from the port, moving towards extremely high efficiency. Most biomass plants only supply electricity, scaling around 25 to 30 percent energy efficiency. We will be close to 80 percent.
“This model also attracts other players and the politicians and Flanders Investment & Trade (FIT) know that well enough by now. The French biotech company InnovaFeed is very interested in the port of Ghent because they could have a direct connection to our heating plant. The company extracts proteins from tropical flies for salmon farming in Northern Europe. The steam requirement of such a fly farm is so enormous that they would absorb our entire production.
“In addition, we are also making great progress in our CO2 capture. Our biomass, the non-recyclable wood, is a completely green fuel. In principle, we are a CO2-neutral company, but, of course, CO2 does escape from the chimney during the combustion process. We want to capture this and make it usable for industry, for example in the construction industry. The goal is to become a carbon negative power plant. With our partners, including Ghent University, we are taking serious steps in the short term. These solutions won’t take another five years. So, I dare say that we are adding value to the port activities. Our presence and energy supply ensure that companies are less likely to leave and it generates new investments.”

BEE currently focuses exclusively on that business-to-business market. Do you want to grow into a private energy supplier?
CORTEN. “We ask ourselves that question very often. It is not impossible, but then as a company, we will have to wait for the new shareholders. We have a strong team, and a major capital operation is coming up in the near future. The idea is to attract one or more parties who can also guide the company further into the next growth phase. The start-up phase is really behind us. The challenge now is to determine where the focus of our growth will be. As management and main shareholder, we have our ideas about that. Whether or not we will move into B2C and also become the household energy supplier is an issue that must be addressed with the renewed Board of Directors after the capital round.”

So, how much money are we talking about?
CORTEN. “Somewhere between 20 and 30 million euros. We are already talking in an explorative way with a number of people we want to get to know. To be clear, we have no financial need, so we can take our time over that.”
VICKY BUYSE. “It is a healthy growth ambition. At some point, you have to dare to take the next step to grow. Standing still or going backwards is no longer an option.
The current plant is owned by BEE, with the support of the London investment fund Equitix, the National Westminster Bank and the Belgian cooperative Zonneberg. In the next power plants, we want to have a majority interest which requires funding.”
CORTEN. “We are not going to exclude any parties in advance. The investment can come from private equity, but also from the larger Belgian family capital. In Flanders, you do have a number of family offices with which we want to have serious discussions. We are mainly looking for a good match. BEE is an industrial company. Therefore, you want to talk to partners who also think industrially.

So, it's not your intention to become the next Luminus or Eneco?
CORTEN. “We are ambitious. Again: never say never. Perhaps tomorrow we will have shareholders who would appreciate that growth perspective. But then it must be clear that we are an added value for the market.
“It currently has too many A brands. Compare the market with the shampoos in the supermarket. The shelf is full of many different brands, but in the end they belong to L’Oréal or Procter & Gamble. I believe such consolidations will also occur in the Belgian supplier market. We will not be able to compete at the top end of the market. We are too small to take over Luminus (laughs). But we might be able to compete at our level.”

If another player doesn't take you over first.
CORTEN. “The market share of the A-suppliers is too big. I don’t believe the competition watchdog allows them to take over. We are not for sale anyway.”

Since you haven't gone bankrupt over the past year like some other small players, does this mean you're financially sound?
CORTEN. “We got through the crisis relatively smoothly. Our balance sheet strengthens every year. Our turnover has risen above 100 million euros. Profits are also in the millions. We now have a good flow of recurring income.
“The crisis has indeed caused an aggressive shake-out in the market. Don't forget that the big players also suffered. For years, we were in a race to the bottom to offer the cheapest rates and products. We were wrongly spoiled in that area. The crisis ensured that some stability has returned to the market. We see gas and electricity again as sustainable goods that we must use more economically.”

Have you now digested the false start caused by the political ramblings?
CORTEN. “We dealt with that in a zen manner. No, that's a wrong word. I did get very angry about that. Our partners here at the port too. As an entrepreneur, you try to do as much as possible. We have developed this completely by ourselves, haven't we? Apart from Ecopower, we are the only fully Belgian energy supplier and producer. We experienced many problems - or more positively - challenges during our first 12 years; we certainly didn't get it for free. Now we are stronger, and we will continue on our momentum.”

Nevertheless, with the current geopolitical situation, there seem to be enough challenges?
CORTEN. “We’ve had so many challenges since 2016…. I'm gradually getting over it. The covid pandemic broke out three months into the construction of this plant. Then, raw material prices began to rise at an unprecedented rate. The banks got very nervous. But even that worked out successfully: the plant was built within the deadline and within budget. Now, of course, we are faced with the misery of green certificates. We don’t quite know yet how this will turn out. The banks are reacting very nervously to that too. Oh well, we've mortgaged our house so many times now (laughs). Our elephant skin is getting thicker and thicker. And then I must not forget the extremely high electricity prices. For once, I would love to be positively challenged.”

With government support?
CORTEN. “I prefer to stay as far away from that support as possible. Everyone agrees that the energy issue needs a clear, scientifically based long-term strategy. They should be spending their money on that. Energy is largely about infrastructure and future prospects. If you look at how things are played with green certificates, digital metres, permits for installations… There is an inadequate match between politics and the energy sector. I hope they make well-informed decisions and then stay away from it for years.”