Brazil leads regional advance

Manufacturing competition in Latin America is hotting up.

Serious business...Gamesa opened its first Brazilian manufacturing facility in July
Serious business...Gamesa opened its first Brazilian manufacturing facility in July

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For many years, Enercon subsidiary Wobben Windpower was the sole manufacturer on the continent, its only competition provided by imports until 2008, when Argentina’s Impsa opened a factory in Brazil’s north-eastern state of Pernambuco.

Now several major manufacturers have announced plans for facilities in the country, which is emerging as a manufacturing hub for the region.

Indian giant Suzlon, just falling short of Enercon to become Brazil’s leading turbine supplier, is planning a factory with the capability to produce 300 blades a year in Rio Grande do Sul, in the south. It will employ 200 people, on top of around 200 staff at Suzlon’s operations and maintenance facilities.

Big guns make their move

Alstom expects to start manufacturing at its factory in Bahia, north-western Brazil, in October. It will produce up to 300MW of equipment a year, including nacelles, blades and towers, a third of which will be exported to the rest of the region, says Marcos Costa, Alstom’s head of power for Brazil and Latin America. "If demand is higher than expected we could easily increase capacity," he adds.

Siemens entered the Brazilian market in January with a 78MW order for a project in Rio Grande do Norte. A spokesman for the company says it has signed three contracts for wind farms in Brazil, where the company is establishing a supply chain: "The prospects are good, but it’s too early to talk about a factory," he says.

Last year Vestas said that it was looking into manufacturing in Brazil. At the Windpower Brazil conference in September, general manager Carlos Levy said the company hoped to finalise its research in about three months. However, Vestas did not respond to recent questions from Windpower Monthly.

GE and Gamesa have announced plans to launch research facilities in the region, and the latter has this summer opened a nacelle factory in the north-east.

Wobben has continued to expand its operations, opening a third factory in the northeast of the country in April. It expects to install 22 wind farms totalling 554MW in Brazil by the end of 2012. Managing director Pedro Vial expects there to be five or six manufacturers in Brazil in the near future.

Brazil has one of the biggest potential markets in the world, he adds, but describes its evolution as a steady trickle of 1-2GW a year, rather than an explosion. Wobben can now produce up to 500MW a year, which Vial believes is sufficient.

The competition has arisen because of the certainty of demand engendered by the government’s support of renewables through its programme of incentives for alternative electricity sources (Proinfa) and the subsequent auction system, which together promise 1-2GW of wind a year.

Passing the 1GW milestone

Arthur Lavieri, CEO of Suzlon Brazil, says: "What’s happening in Brazil is a natural consequence of the issues we have in terms of creating green jobs and energy security. In May Brazil installed its first gigawatt of windpower. Everyone is very excited about this. But this is only 0.8% of the total energy need of the country."

Vial points out that Brazil needs to increase its energy production by 4-5GW a year to support its growing economy. For this reason, he does not foresee future problems with financing wind, as energy is one of the Brazilian Development Bank’s highest priorities.

Manufacturers and developers alike are now gearing up for the next round of auctions. Developers have been approaching manufacturers much earlier in the process than last year, when some deals were struck just two months before the auctions. "I’m seeing people being a lot more careful and serious," Lavieri says.

The overarching sentiment is that wind is now being taken seriously and the only way is up. Vial says: "No one here talks about alternative energy any more, it’s just another form of energy. This is a great victory."

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