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Between 1999 and 2005, wind energy capacity in Brazil increased only by very small amounts until 2006, when 208 MW were installed in one year, bringing the total to 237 MW. In 2007, only one wind farm came online: Eólica Millennium, a 10.2 MW project acquired by Pacific Hydro from local company Bioenergy. This brought the total to 247 MW.
The main obstacles to Brazilian wind power are significant import duties and taxes which make projects less profitable unless complete local production and sourcing are established. Also, the country has prioritised the development of its biomass potential in the past few years. Wind power, however, is expected to grow substantially in the near future.
In 2002, the Brazilian government passed a programme called the programme of Incentives for Alternative Electricity Sources (PROINFA) to stimulate the development of biomass, wind and small hydro power generation. This law was revised in November 2003.
In the first stage (up to 2008, although the deadline has been extended until the end of 2008, and will possibly be extended into 2009), the programme guaranteed power sale contracts of projects with a total capacity of 3,300 MW using these technologies, originally divided into three equal parts of 1100 MW per technology. Wind’s share was later increased to 1400 MW. The Brazilian state-controlled electricity utility Eletrobrás will buy power produced by RES under power purchase agreements (PPAs) of 20 years at pre-determined preferential prices.
Originally, a second stage of PROINFA was planned for when the 3,300 MW objective had been met, with the aim to increase the share of the three renewable sources to 10 per cent of annual electricity consumption within 20 years. Renewable energy generators would then have been required to issue a number of renewable energy certificates in proportion to the amount of clean energy produced.
However, despite the high expectations raised by the PROINFA programme, the scheme has to date failed to deliver the great number of wind projects the government had aimed for. As a result, the current government is showing little interest in taking PROINFA to its second stage, and is considering replacing it with an auction system. The Brazilian Wind Power Association (ABEEolica) is lobbying to proceed with PROINFA II while at the same time introducing an auction process.
The outlook for 2008 is quite optimistic: there are 14 wind energy plants financed by the PROINFA programme under construction, amounting to 107.3 MW of installed capacity. In addition, experts estimate that another 27 wind farms representing 901.29 MW could be added to the grid in 2009, provided that PROINFA is extended until the first semester of 2009.
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