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Brazil: Opportunities in the Brazilian Wind Power Energy Market

Global Opportunities: Brazil has been diversifying its energy sources with previous auctions and the ongoing construction of new wind energy farms. 

Brazil: Opportunities in the Brazilian Wind Power Energy Market

The country keeps developing this sector, with a new auction in October 2016 for energy reserve that includes wind power sources, which can bring opportunities for Swiss manufacturers of equipment used in the production of this renewable energy source.

As the largest wind power market in Latin America and among the world’s top 10, Brazil is expected to reach 18,8 GW of wind capacity by 2019 (an average growth of 20% per year) and 45 million inhabitants being supplied by wind power. Therefore, it is impossible not to take a closer look on Brazil when it comes to wind energy, which between 2014 and 2015, the country’s installed capacity had a growth of 46% and an increase in generation of 75%.

Brazil has a big potential for this segment and, despite the current economic challenges, the demand for clean energy projects tends towards to a maintenance in the long term. The reason is the recognized dependency on hydro-power and necessity of diversification in electricity production. The Brazilian Ministry of Mines and Energy recently released the 10 year plan for energy policy (Plano Decenal de Expansão de Energia), which underlines the willingness of Brazil to increase its wind power capacity by 24 GW.

The country follows an exigency for getting Brazil’s Development Bank (BNDES) financing, which establishes that a certain percentage of wind power structures components must be manufactured locally. However, for some higher technology products it is still necessary to import. Among the products imported are: nacelle’s components (generator and gear boxes); nacelle’s accessories (anemometer, direction sensor and lightning rods); Yaw system (slip ring and gears); wind turbine blades (PVC foam, balsa wood, carbon fiber fabric, adhesive and sealant); parts for the construction of towers (door and hatch); cube (extensor and PET foam). 

There are public auctions for the construction of new energy parks and for reserve energy, in which the latter includes new or already installed parks. They come with a contract establishing that they are supposed to start operating in a posterior date, together with a hiring contract for their energy production for an average period of 15 to 20 years.

In 2015, the public auction of type A 3, hired 19 projects for wind energy (538,8 MW potency) to be delivered in 2018, which will be located in the Northeast of the Brazil. The investment forecast is  BRL 1,91 billion. During the year of 2014, the public auction A 5 was held, which operations are planned to start in 2019 with 36 wind energy parks being sold, all located in the Northeast, which corresponds to an investment of BRL 3,46 billion. This year, the Italian company Enel, through its Brazilian subsidiary Enel Green Power Brasil, started the construction of a wind power plant in the State of Bahia. The complex called Cristalândia should start its operations in the second semester of 2017, with an investment prediction of USD 190 million.

It is important to highlight that a new auction for energy reserve of wind and solar sources will also happen this year, on October 28th. Its production must begin on July 2019 and the supply contract lasts 20 years. There are 799 registered wind power projects, with a total of 20.766 MW. There are no prices for this wind energy auction yet, but in the last of this type, the initial price was BRL 213,00/MWh (USD 65.15) and the selling price was BRL 203,46/MWh (USD 62,23).

If you are interested in receiving more information about this topic, please contact S-GE and its Swiss Business Hub Brazil for an initial assessment.

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