Brazilian Wind Energy Projects Advance in Government Auction

Power auctions organized by Brazil’s government on 17 August have indicated the country’s growing interest in renewable power projects, particularly wind.

Forty-four wind power projects with a total capacity of 1,067 megawatts succeeded in the auction, winning 39 percent of the total capacity contracted, offering an average price of $ 62.91 per megawatt/hour, MercoPress news agency reported.

The prices achieved mean that the country’s growing wind sector can continue lowering generation costs, boosting investment both in wind farms and equipment manufacturing facilities.

Prior to the auction government-run energy research group EPE head Mauricio Tolmasquim said, “Before you had a situation in which wind power always needed someone holding its hand, or to have the government behind it — now wind power is strong enough that it can scare the big players.”

Seven years ago the Brazilian government created an incentive program that offered to buy wind power at higher rates than other types of generation. As a result, by 2010 wind farms were offering to sell power 50 percent below the average price during the government incentive period as new technology, tax breaks and more equipment manufacturing became available.

Foreign companies now entering the Brazilian wind energy market include Spain’s Gamesa  and France’s Alstom, both of which have invested in equipment factories in the country, while U.S. power giant General Electric  and India’s Suzlon Energy (NSE:SUZL.NS) are considering expanding their existing production bases there.

By. Joao Peixe, Deputy Editor OilPrice.com