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Market Status: Brazil - Records set but end of honeymoon in sight

BRAZIL Brazil's wind power industry is set for another stellar year in 2015, with installed capacity set to grow by two thirds to almost 10GW.

Current political backdrop

Government remains strongly supportive of wind power but it is seeking to expand solar and natural-gas electricity production

High point of 2014

Industry grew at a record rate, wind dominated a series of tenders

Low point

Wind Power Energia filed for bankruptcy as parent company Impsa struggled to meet payments. Then eight of its turbines were blown over in Rio Grand do Sol

Key issue in 2015

The continued effect of drought on Brazil's large hydro industry

Brazil's wind power industry is set for another stellar year in 2015, with installed capacity set to grow by two thirds to almost 10GW. This will involve building almost 4GW over the next 12 months, compared with 2.4GW in 2014, which was a record year for the country.

The wind sector is expected to continue growing for the next few years, if at a slower rate. Brazilian wind energy association Abeeolica forecasts installed capacity to exceed 16GW by the end of the decade.

Government commitment to the sector remains strong. Energy planning and research agency Empresa de Pesquisa Energetica (EPE) forecasts that wind will deliver 20GW of the 70GW of capacity that Brazil needs to build by 2024. Dilma Rouseff, who began her four-year term as Brazil's president in January, has appointed Eduardo Braga as energy minister, who reiterated support for renewables and promised research into the development of offshore wind power.

Brazil's 7,490-kilometre Atlantic coast offers huge potential for the technology and there could be synergies with the country's growing offshore oil and gas industry. Eolica Brasil is planning to begin the installation of a 12MW pilot project next year.

But there has been concern about wind's dominance in recent tenders. To tackle potential imbalances, EPE has scheduled a series of tenders to give more room to other forms of generation, especially natural gas and solar energy. No wind farms are participating in April's A5 tender, which is dominated by thermoelectric plants, with wind developers holding out for the A3 tender (which requires completion in three years) in July.

The sector faces some sharp opposition from interested parties keen to whittle away advantages that have helped it clinch energy tenders in recent years. Last year, the wind sector narrowly avoided losing access to a 50% discount on transmission fees that would have rendered it uncompetitive against rival energy sources.

The government's growing demands for parts to be sourced domestically are also limiting further growth. This threshold has been rising steadily and is putting significant pressure on manufacturers to meet demand.

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