The talk on the conference floor was that Vestas was about to announce the start of manufacturing operations in Brazil. But Carlos Levy, general manager of Vestas do Brasil Energia Eolica, refused to be drawn on whether that would be the case.
"We are looking at all options and we hope to finalise our research in about three months," he said.
Developers that secured bids at the auction were in a buoyant mood. Roberto Honczar, finance director at Brazilian renewable energy company Renova Energia - which secured the largest number of megawatts at the December and August auctions - bought a quarter of the wind energy in the reserve August auction for six wind parks at an average power purchase price of BRL 121.25/MWh ($70.94/MWh).
Economies of scale
Honczar said that Renova is able to secure efficiencies through economies of scale. Renova's large-scale projects need large volumes of equipment, which helps to negotiate better prices with suppliers. And Renova has an advantage over smaller projects because the cost per installed megawatt is lower for investment in roads, transmission lines or heavy equipment. "These contracts will provide adequate returns for us," Honczar told the conference.
Auction winners
Spain's Iberdrola Renovables and local partner Neo Energia picked up the largest amount of energy contracted in the August auctions, with 109.5MW from nine wind projects proposed for the north-east of Brazil.
Laura Porto, business development director at Iberdrola, said that stable regulations, state support and financing by banks such as BNDES have helped the sector develop. She said Iberdrola expected to make further bids in upcoming auctions.
Not everyone at the Rio de Janeiro conference was positive about the price, however. Some delegates expressed concern that bids plunged to an unprofitable level. Lauro Fiuza Jr, vice-president of Brazil's wind industry association, Abeeolica, and chief executive of one of the country's largest wind developers, Grupo Servtec, withdrew from the bidding process.
He decided that the price was too low, even though some wind companies calculated that they could sell energy for BRL 122 ($71.47) per megawatt hour. He said his company pulled out at BRL 130 ($76.21) (Windpower Monthly, October 2010).
Servtec, like other wind developers, will collaborate with manufacturers and banks to enter the bidding process in future auctions. "It is essential that all parties in the process prepare careful bids and ensure that trust is secured ahead of the auction," Fiuza said. "This has become a serious, professional game."
Work in progress
Suzlon's Per Sorensen said that low prices will force more than half of the companies with successful bids to reassess their plans by holding talks over prices for equipment or services with everybody from wind turbine manufacturers and engineers through to crane suppliers and logistics companies.
Siemens's Angelo warned that many of the developers who won bids in the December wind auction are still negotiating contractual terms with their suppliers. "It's a slow process," he said. He pointed out that many challenges remain, not least logistic ones. For instance, few companies have the expertise or vehicles to transport equipment such as 50-metre turbine towers.
Bottlenecks
Other experts complained that delays in upgrading Brazil's ports and infrastructure are causing bottlenecks in the supply of imported wind energy products. There were also warnings that many new projects have not been properly planned due to inaccurate wind measurements and a lack of preparatory work.
Marcelo Furtado, executive director of Greenpeace in Brazil, said the industry and the Brazilian government need to develop the burgeoning wind industry carefully. A price war that leads to wind projects failing would benefit no one, he said. "It is important that the projects are built properly and that the government sets long-term rules for wind."
Coming of age
Brazil's wind industry took its first baby steps with the Proinfa programme; the auctions offer a wealth of new energy projects to power the country's expanding industries and cities. There is a sense that the sector is maturing. Although lot of hard work lies ahead to realise wind energy's full potential, industry experts are aware of potential pitfalls and are preparing for further action.
