Brazil

Brazil

Hostile climate for offshore wind in Brazil

Asa Branca developer determined to secure finance

North-eastern Brazil offers near-perfect conditions for the development of offshore wind. It boasts steady onshore winds, which gust no faster than 23 m/s, shallow waters without big waves, and burgeoning electricity demand from a largely coastal population.

Despite these ideal conditions, no offshore installed capacity has yet been built in Brazilian waters, and lone developer, Eólica Brasil, is struggling to attract investment for its ambitious project.

Eólica Brasil’s plans for a huge project, known as Asa Branca Maritima, focus on waters off Ceará. The plan envisages the installation of just over 11GW in 23 phases of 480MW each. Following successful completion of the first phase an additional 1GW in new capacity would be added every year for a decade, explained Marcello Storrer, Eólica Brasil’s president, speaking with Windpower Offshore.

Given that "the turbines can be sited in between seven and 12m water depths, no further than 13km from the coast, the cost will be lower than $2.9m per MW (€2.2m/MW)," estimates Storrer.

A major obstacle standing in the way of Asa Branca Maritima is the Brazilian government’s and other onshore wind developers’ lack of interest in offshore options, despite its potential to "be a much bigger business than anything onshore," says Storrer.

Brazilian wind farms are producing electricity for at a highly-competitive price, around $55/MWh, and with the government regularly auctioning new capacity onshore wind is expected to grow from current installed capacity of 1.8GW to around 8.5GW by 2016.

However, the best onshore sites are rapidly being allocated, argues Storrer, and in order to realise Brazil’s full wind potential the government should introduce feed-in tariffs (FiTs).

The government is strongly influenced by a powerful construction lobby that wants to build more large hydropower dams in the Amazon, and that sees the wind industry as a threat, claims Storrer. This is why it has thus far refused to countenance FiTs.

"Given the current system of auctions of 20-year PPAs, 80% of which are going to onshore wind farms, offshore wind production would be priced out of the regulated market where the average energy price is $57/MWh," he says.

An alternative, at least for Asa Branca Maritima’s initial 480MW phase, is to become a so-called self producer. Under this model, Eólica Brasil would form a joint venture with a major energy consumer, such as an iron-smelter. A private transmission line would connect the wind farm to the consumer.

Securing finance from a Brazilian bank is not realistic, in Storrer’s view, however, he believes a supplier credit deal could be reached with a turbine manufacturer, once project permitting is complete.

Almost all required permits have been secured for Asa Branca Marítima, and Eólica Brasil recently formed a joint venture with Offshore Wind Power Systems of Texas to install an offshore platform from which it will collect accurate meteorological readings to demonstrate the scheme’s financial viability.

Storrer is convinced that with the introduction of larger, more productive turbines, offshore wind will become competitive in Brazil. He is confident that finance will be secured to allow construction of the first phase of Asa Branca Marítima by 2016/2017.

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