Latest news on renewables in Brazil

published on 10th August 2020

General overview

There is definitely a lot going on in the renewable energy market in Brazil. The data officially released by the government as of April 2020 shows that installed capacity of renewable sources is rapidly increasing and gaining even more importance in the Brazilian energy matrix.¹ This increase comes primarily from photovoltaics (PVs) which in April 2020 increased by 101 percent compared to the same period for last year. The largest increase was led by the distributed generation model reaching a significant growth of 273 percent. Other PVs also grew comparing both years (i.e. 40 percent). This is consistent with the forecasted development as the cost of PV electricity has decreased consistently over the years, as a result of the decrease in price of all other transactions within the supply chain (e.g. solar panels, taxes, etc.). Brazil of course is not running stand alone on this attractive prices for photovoltaics, this phenomenon is observed worldwide.

What’s new?

Royal Dutch Shell PLC (a multinational giant on energy sector) is expanding its photovoltaics operations in Brazil. It is significantly investing in the country, especially in the state of Minas Gerais. The Company registered 10 new projects with the National Agency for Electric Energy (ANEEL) with total output of around 467 MW. According to Company’s executives the focus will be to find buyers on the free market for electricity.² The government has made some actions to facilitate investments in the sector. For instance in 2019, the state of Minas Gerais simplified significantly the environmental licensing process required for photovoltaic power plants through the normative resolution n.235/2019.³ The north of the state holds already great potential in terms of solar radiation to develop sun energy and simplifying the process is expected to attract big players like Shell.

Industry development is also benefiting from the simplification and plan for the long term in the region. In 2020, Amerisolar Brasil, a joint venture between two important players in the market (i.e. Brazilian Nova Renováveis and Chinese Amerisolar) announced that will start fabricating solar panels in Brazil and have also decided to put their manufacturing plant in Minas Gerais.⁴ If solar power in Minas Gerais blooms out to its full potential, the Company will benefit from being geographically close to clients.

This decrease in bureaucracy has also made it attractive for local investors. The Brazilian company, Energia Aurora, announced that will invest approximately 6 billion Brazilian Reais (approximately 1 billion Euros as per the latest average EUR quotations in 2020 June/July ) in a 1.36 GW PV power plant expected to start operating in 2020. The Company is also involved in other PV projects in the state and is investing consideraly in PV projects.⁵

Would be offshore wind energy the future in Brazil?

In March, 2020, the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) made held its first public audience regarding the development of offshore wind Energy in the state of Ceará, in the northeast. Offshore wind have higher investment and maintenance costs but can also work at much higher capacities than onshore power plants. Brazil is still waiting to develop any offshore wind projects but the such investment might represent a trend.⁶ Additionally, a study prepared by a recognized research company within renewables area in Brazil (i.e. Empresa de Pesquisa Energética – EPE) was released in June showing that Brazil technically has the potential to generate incredible 700 GW in offshore wind, if developed.⁷

Covid and its recent impact

On March 31, the Brazilian Ministry of Energy and Mines announced the postponement of all national energy generation and transmission auction due to the Covid-19 crisis. On one hand, that might represent a frustration for those players already prepared and expecting such auctions happening soon. On the other hand, it might be an opportunity for those new interested investors that were still not totally prepared to entry in the market and now gained bit more time for make it happen.  

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1 http://www.mme.gov.br/web/guest/secretarias/energia-eletrica/publicacoes/boletim-de-monitoramento-do-sistema-eletrico/1004
2 https://www.reuters.com/article/us-shell-brazil-solar-interview/shell-looks-to-brazil-solar-power-sales-from-farms-that-are-due-online-in-2023-idUSKBN23G2YY
3 https://epbr.com.br/shell-reforca-aposta-em-geracao-de-energia-solar-em-minas-gerais/?utm_source=push
4 https://www.portalsolar.com.br/blog-solar/energia-renovavel/amerisolar-brasil-vai-fabricar-paineis-de-energia-solar-em-minas-gerais.html
5 https://www.portalsolar.com.br/blog-solar/energia-renovavel/aurora-inicia-primeira-etapa-de-projeto-de-usina-fotovoltaica-em-minas-gerais.html
6 https://www.evwind.com/2020/03/07/primeros-pasos-de-la-eolica-marina-en-brasil/
7 http://abeeolica.org.br/noticias/epe-eolica-offshore-tem-potencial-de-700-gw-no-brasil/

 
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