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Brazil

Brazil

Wind industry bids flood Brazil

Wind power companies presented a total of 3600 MW of projects for the Brazilian government's Proinfa renewable power program, more than three times the 1100 MW for which contracts for wind power are on offer. "It is a success that we can celebrate, a demonstration of how attractive the program is," said mines and energy minister Dilma Rousseff. "When rules are clear and stable, there is an immense desire by investors to participate. Today we have one of the most significant alternative sources programs in the world."

Proinfa is offering fixed price contracts for 3300 MW of renewables, split between wind, biomass and small scale hydro. The contracts are backed by attractive loan terms, which were announced at the end of March along with the Proinfa prices (Windpower Monthly, May 2004). The deadline for bids was last month. All contracts were due to be awarded by late May, with Eletrobrás scheduled to sign 20-year power purchase agreements on May 31. The first Proinfa projects must come online by December 2006.

As expected, most wind projects were proposed for the northeast of Brazil, with bidders putting forward 2441 MW of projects for contracts. A further 937.68 MW of wind was proposed for the south and 937.68 MW for the south east. No projects were presented for the inland regions of the north and centre-west of the country. All told, some 6600 MW of projects were submitted for Proinfa consideration, including 1924 MW of small scale hydro and 995.2 MW of biomass.

The federal government's power company, Eletrobrás, was last month selecting projects in order of the first to be awarded environmental licenses. Half of the 1100 MW of contracts earmarked for wind will be allocated to companies that are not related to any traditional power companies, while the remaining 50% will be open to related companies such as SIIF Energies, a division of French nuclear utility EDF, Enerbrasil or Gamesa of Spain.

Rio Grande do Sul state expects Eletrobrás to bend the rules that stipulate that no state may host more than 220 MW of Proinfa supported projects and allow up to an extra 100 MW. Three wind power projects in the state already have full environmental licensing.

"The federal government has told us it would increase Rio Grande do Sul's quota to accommodate these projects," says Jussara Mattuella, an advisor to the state's energy department. The three projects require some BRL 300 million investment: Elebras's 72 MW Cidreira project, Gamesa's 98 MW Piratini project and Enerfin/Elecnor's 150 MW Osorio project.

The government expects Proinfa to attract around BRL 8.6 billion ($3 billion) of investments, of which just under half would be purchase of equipment and machines, and create 150,000 direct and indirect jobs in Brazil. Annual revenues for companies participating in the Proinfa program are estimated at BRL 1.6 billion, a sum to be raised through a surcharge on all electricity bills.

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