Servtec's Lauro Fiuza says the wind farms will have rated capacities of 50 MW, 57 MW, 31.5 MW and 16.5 MW and are all qualified for payments of BRL 220/MWh ($122/MWh) for 20 years from state power company Eletrobrás under Proinfa. Part of the manufacturing will be done in Brazil, including all towers and "some other components of the turbine," he adds.
Fiuza believes the turbines fit the program requirements. "I am buying a wind turbine that is suited for the Proinfa program. [Suzlon's] commitment to us is to deliver the equipment that along with the cost of the project will suit the restrictions of the program," says Fiuza. "Otherwise, a big company like Suzlon would not do it." He and Suzlon's head office in Brazil decline to provide further details.
As a rule of thumb, a wind project's "balance of plant" costs, which include pre-development and infrastructure such as roads, cabling and site preparation, do not make up more than 30% of total project cost, even in challenging terrain. Towers are unlikely to represent more than about 20% of the cost.
The point is not lost on Jorge Antonio Villar Alé, who heads Centro de Energia Eólica, a wind energy research facility at Pontifícia Universidade Católica do Rio Grande do Sul. "A project of this type could only be effective if it was to manufacture the wind turbines in Brazil," he says. He suspects Suzlon may be lowering its turbine prices on the front end to squeeze in under the Proinfa requirement and will offset that concession by taking an equity position in the wind project on the tail end.
The 60% content requirement is designed largely to encourage wind power companies to set up local manufacturing in Brazil. So far only Wobben Windpower, a Brazilian arm of German turbine company Enercon, has taken the plunge. Wobben's resulting monopoly has given it an all-dominant position in the Proinfa program.
Fiuza says Servtec ruled out using Wobben machines because the company could only provide 800 kW turbines "at prices that were not competitive." As Proinfa is only a temporary program, wind companies have been hesitant to set up major manufacturing in Brazil (Windpower Monthly, June 2007).
While Villar Alé does not know how the Proinfa requirement is being met by Servtec, he says the Portuguese group HLC is also negotiating with Suzlon and Nordex for possible participation in projects in Brazil.