Renewable energy

Brazil – Opportunities within renewable energy sector

The Brazilian market for renewable energy continues to grow and attract international players. Brazil is, due to its size and abundance of natural resources, a true power house of clean and renewable energy. Innovation Norway Rio has a significant network in the sector and knowledge on how to best enter and succeed in the market.

Brazil stands out in the wind generation, with 13.4 GW of installed capacity (2018). This volume supplies about 22 million households per month, or 67 million people. In Brazil, there are 534 wind farms in 12 states, with more than 6600 wind turbines. Brazilian Wind Energy Association (ABEEólica), is an institution that brings together and represents the entire production chain of the wind energy industry in the country. Winds in Brazil have an average capacity factor of 41.8% against 25% of the world’s average.

The Brazilian wind power market shows great potential for both project developers and investors as well as for providers of high-tech tools and services for increasing the efficiency. Statkraft has over 300 MW of installed capacity in renewables in Brazil with four wind power plants.

Solar sources currently represent a little more than 1% of the installed capacity in 2018. However, the growth has been impressive, with an increase of almost 100% from 2017 to 2018. The conservative forecast from the Energy Research Company (EPE) is that by 2026, solar energy should account for 6% of the country’s energy matrix. According to the Brazilian Association of Photovoltaic Solar Energy (ABSOLAR), in 2040 the solar source should reach the first position in the energy matrix ranking, with a 32% stake, surpassing the hydroelectricity.

Brazil has just reached the mark of 500 MW of installed power capacity in microgeneration systems and mini-solar photovoltaic systems in residences, commercial buildings, industries, rural producers and public buildings. A survey conducted by Ibope in 2018 pointed out that 9 out of 10 Brazilians want to generate renewable energy at home.

Brazilian Energy Research Agency (EPE) estimates that photovoltaic distributed generation will reach an installed capacity of approximately 78 GWp in 2050 in the Reference Scenario with the current policies. If friendlier policies are adopted, the potential is 114 GWp of installed capacity by 2050.

Petrobras stated in a new strategy presentation that its growing investments in renewable energy will take the form of participation in solar energy tenders and will be enabled by gradual entry into the distributed solar generation market and offshore wind projects. Their efforts in these areas will include partnerships with Total and Equinor.

Scatec Solar and Equinor have agreed to establish a joint venture to build, own and operate large scale solar plants in Brazil. The joint venture has an ambition to become a significant player in the Brazilian solar market. Around 170 000 households in Brazil are now powered with electricity from the Apodi Solar Plant from the above-mentioned joint-venture. The 162 MW Apodi Solar Plant, operated by Scatec Solar, was Equinor’s first step into solar energy.

The sector of bioenergy is very representative in Brazil, accounting for 25% of the Brazilian energy matrix. Among renewables, bioenergy represents 58% of the consumed energy. The sources are mainly Ethanol, cane bagasse and wood charcoal. In electricity terms, Brazil has an installed capacity of almost 15 GW.

Brazil has the most developed ethanol-based fuel model with a blend of ethanol in gasoline of 27%, and 8% of biodiesel into diesel. The sector also seeks to advance into more advanced generations of biofuels with interesting potential for Norwegian companies.

The Norwegian company UMOE has an ethanol and bioenergy plant in the Sao Paulo State.

Offshore Wind
The Brazilian Senate has passed a new law that instructs ANEEL (National Electric Energy Agency), with the support of the ANP (National Petroleum Agency), to conduct wind energy auctions on offshore platforms.

For now, Petrobras has formed a partnership with Equinor to study the feasibility of the installation of wind turbines in the high seas. Equinor has plenty of experience in the field, having installed several wind generators on deactivated platforms, as well as in electrification projects for the operating fields in the North Sea.

Some other projects are being planned in Brazil, but basically in shallow waters. The Petrobras project in the Northeast region is the most advanced one.

Equinor and Aker Solutions are the main Norwegian companies actively prospecting business in the Brazilian offshore wind market.

New Government
The new government has been giving clear signals that they will keep the same pro-market policies as pursued by Temer’s government, and the will to make the system more business-friendly. The new Minister of Mines and Energy, Admiral Bento Albuquerque, said that President Jair Bolsonaro will implement the proposals for privatization of Eletrobras and for the energy sector reforms presented under Michel Temer’s government.

Despite the unfavorable economic and political scenario in Brazil during the past few years, the market for renewable energy continues to grow and attract international players. Maneuvering in the sector, one can meet many challenges, which can be most easily overcome by finding a suitable local partner and thinking long-term. Innovation Norway’s office in Rio de Janeiro will be glad to provide support for you to succeed in the Brazilian renewables market.

If you would like more information, please contact:
Bruno Leiniö
Innovation Norway, Rio de Janeiro
T: +55 219 9724 2525

Photo: Brazil offers large opportunities in the renewable energy sector, Thinkstock

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