Brazil - Lack of road and skills limit major growth

BRAZIL: At the close of 2013, Elbia Melo, executive president of Brazilian wind-power association Abeeolica, was celebrating a historic year with 4.7GW of new wind power projects awarded in three auctions, all of which is scheduled to be built by 2018.

Logistics… Shipping components to projects is expensive
Logistics… Shipping components to projects is expensive

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Add that to projects under way from previous tenders, and Brazil is expected to install and commission 10GW of new wind capacity over the next five years, nearly quadrupling its current total of just under 3.5GW.

In 2013 the country added 938MW of installed wind capacity, a little down on 2012's figure of 1,130MW, but still substantial. However, with 600MW being forced offline due to a lack of grid connection, the true figure for additional capacity is only just over 300MW.

Behind the celebrations however, lurk concerns over whether this ambitious programme can be realised in the face of a shortage of skilled labour and the country's poor logistics network.

The government and industry representatives have already announced the creation of new technical courses that should be inaugurated in the coming months. But on the logistics side, costly maritime transport and a lack of rail tracks force manufacturers and developers to truck nacelles and blades thousands of kilometres on small roads, navigating tax and goods inspections on interstate borders on the way.

Transport challenges

The journeys become even more difficult on the country lanes that lead to the wind farms now being built inland in the under-developed northern states.

It is a sizable problem when hundreds of turbines, blades and tower parts have to be moved at the same time. Blade manufacturer Tecsis and turbine maker Wobben Windpower (the local subsidiary of Germany's Enercon), which have factories located in the south-eastern state of Sao Paulo, say it takes at least two weeks to transport equipment to wind farms in the north-east, more than 2,000 kilometres away.

Another question is how all this activity will affect participation in the auctions scheduled for this year. The government has already announced it will hold an auction in June, in which the energy sold should start to be delivered in 2017.

Still, optimism remains high. The Brazil National Development Bank (BNDES) has extended deadlines to allow project developers to meet local-content rules and pledged that it will continue to offer credit. In 2013 it lent BRL 3.6 billion ($1.5 billion) to the wind sector and, according to bank officials, expects to increase lending to wind projects by 20%, reaching BRL 4.3 billion by the end of the year.

Current political backdrop Centre-left coalition gives state-controlled companies strong influence in the market. But this is offset by stability of rules based on lowest price auctions and strong financing from the state-controlled National Development Bank (BNDES)

High point of 2013 Sale of 4.7GW in new wind projects to be completed by 2018. A record compared to previous years

Low point Lack of grid connections forced some 600MW in completed wind farms offline in 2013

Key influencer Luciano Coutinho, president of BNDES - the sole provider of finance for large infrastructure projects

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