Wind Energy in Brazil: The Country of the Future?

Zoë Casey 
July 09, 2013 

At the end of 2012, Brazil had 2.5 GW of installed wind capacity, enough to power four million households, accounting for 2 percent of national electricity consumption. In 2012 alone, 40 new wind farms came online, adding more than 1 GW of new capacity to the Brazilian electricity grid and creating 15,000 new jobs. This represents an investment of USD 3.43 billion (€2.63 billion), which is expected to increase to USD 24.50 billion (€18.8 billion) by 2020. Steve Sawyer of the Global Wind Energy Council (right) gives his opinion on wind energy in Brazil, the “country of the future”. 

How would you compare the current status of the Brazilian wind market to how it was five years ago?

Five years ago, Brazil’s wind industry was in its infancy, with a cap of just 1,100 MW (later 1,400 MW) of wind power development. Since the introduction of the auction scheme in 2009, the industry has taken off in a big way.

Why is the Brazilian wind energy auction system successful?

The key reasons for the success of the Brazilian auction system are:

• A pretty high bar to clear before entering the auction, keeping out the speculators
• A guaranteed 20 year power purchase agreement
• A binding contract to supply the power — if you are in to bid, you better be serious
• Brazil’s superb wind regime
• The availability of BNDES financing
• The fact that the rest of the global market was in a downturn when things were heating up in Brazil meant that everyone was willing to do what it took to get in on the ground floor.

I do believe that the system is sustainable — with some tweaking.

What are the main challenges for the wind industry?

As wind penetrates the system more and more, there needs to be coordinated grid planning to go along with it, and regionally based planning as well as national. The market can only take you so far.

How do you see the Brazilian wind market in 2020? Wind has been excluded from the A-5 Auction — will this have an impact on the projected 2-GW annual growth?

In Australia, Wind Power Is Already Cheaper Than Fossil Fuels, And Solar Is Right Behind

According to the latest research from Bloomberg New Energy Finance, electricity from wind power can now be supplied more cheaply in Australia than power from either coal or natural gas — and solar and other forms of renewable energy aren’t far behind.

Older coal-fired power plants from the 70s and 80s still compete at lower prices than renewables — but only because their construction costs have depreciated. For the deployment of any new power generation in Australia, renewables now appear to be the way to go.

Australia currently charges polluters $23 in Australian dollars per metric ton of carbon they emit, but the study concluded that wind power would still undercut fossil fuels even without that correction of the market’s failure to properly build in the costs of carbon pollution:

The study shows that electricity can be supplied from a new wind farm at a cost of [$80 per megawatt hour in Australian dollars], compared to [$143 per megawatt hour] from a new coal plant or [$116 per megawatt hour] from a new baseload gas plant, including the cost of emissions under the Gillard government’s carbon pricing scheme. However even without a carbon price (the most efficient way to reduce economy-wide emissions) wind energy is 14% cheaper than new coal and 18% cheaper than new gas.…

Bloomberg New Energy Finance’s research on Australia shows that since 2011, the cost of wind generation has fallen by 10% and the cost of solar photovoltaics by 29%. In contrast, the cost of energy from new fossil-fuelled plants is high and rising. New coal is made expensive by high financing costs. The study surveyed Australia’s four largest banks and found that lenders are unlikely to finance new coal without a substantial risk premium due to the reputational damage of emissions-intensive investments – if they are to finance coal at all.

Here’s a graphic of BNEF’s findings, courtesy of Renew Economy:

So the study expects both coal and natural gas to rise in cost over the next two decades. Among other things, coal power consumes more water than any other source of energy. That will drive up coal’s cost, as fresh water becomes scarcer due to the very climate change driven by coal power’s carbon emissions. And in America, at least, there’s evidence that the major proven natural gas reserves will peak out within the time frame of BNEF’s analysis, rendering the boom in that energy source decidedly temporary.

Meanwhile, while the costs of solar and other forms of renewables are currently lagging, they’re dropping fast:

BNEF’s analysts conclude that by 2020, large-scale solar PV will also be cheaper than coal and gas, when carbon prices are factored in. By 2030, dispatchable renewable generating technologies such as biomass and solar thermal could also be cost-competitive.

Wind energy now cheaper than nuclear in France by Paul Gipe

Liberation reports that for the second time in a little more than a year the cost of a new reactor under construction at Flamanville, France has risen dramatically.

Originally scheduled to be completed this year for a cost of €3.3 billion, the cost of the European Pressurized Reactor (EPR) doubled in 2011 to €6 billion and completion was delayed until 2016.

Constructors Areva and Electricité de France (EDF) have announced the cost has again risen, now to €8.5 billion ($10.6 billion) for the 1,650 MW reactor.

Similar cost overruns and completion delays have plagued Areva's EPR reactor under construction in Finland. Originally planned for operation in 2009, the Finnish reactor's start date has been extended to 2015, six years behind schedule.

With capital costs now more than €5,000 per kW ($6,400 per kW), EDF's announcement doesn't bode well for reactor proposals in Ontario, Canada, the US, and in Great Britain.

The French renewables industry was quick to denounce the cost overruns, saying that renewables are cheaper.

The Syndicat des énergies renouvelables (SER) said the situation wasn't surprising, following EDF's announcement earlier this year of similar costs for proposed reactors in Great Britain.

Wind power cheaper than conventional electricity sources, new study shows

may 18, 2012

Wind farm cheaper than conventional electricity sources, new study shows. Wind energy is cheaper than conventional electricity sources in both Kenya and Nicaragua, a new study from a Swiss technology institute has found.

Conducted by research scientists from ETH-Zurich’s Department of Management, Technology and Economics and published in the monthly journal Nature Climate Change, the study also found that wind energy was cheaper than solar in Brazil, Egypt, India, Kenya, Nicaragua and Thailand.

The study is linked to an agreement made at the 2010 climate change conference in Cancun, in which nations agreed to channel money into southern countries in order to lessen the impact of climate change. The study looked into the best ways to spend money on protecting the climate.

Snowtown project shows wind costs below $80/MWh by Giles Parkinson

The ability of New Zealand company TrustPower to land a power purchase agreement for its proposed 270MW Snowtown 2 wind project in South Australia – the first significant PPA written in this country for a new-build wind farm for several years – basically comes down to the power of its wind resource.

While most Australian wind projects would need a PPA of $100-$110 to make a decent return for investors, it is thought that the PPA for Snowtown, signed by Origin Energy, is below $95/MWh, and may be below $90/MWh.

Wind energy can be cheaper than photovoltaics solar energy

april 25, 2012

Generating wind power is more than twice as cheap as solar power photovoltaic (PV) energy production, a study of alternative energy in six developing countries has found.

The findings, published in Nature Climate Change last week (15 April), could help inform global debates on financing initiatives aimed at reducing greenhouse gas emissions in developing countries.

The authors note that differentiating technologies or countries is one of the reforms under discussion in the Clean Development Mechanism following its experience with nearly 3,500 projects in 70-plus countries.