Source: www.speakup.com.br
WE HAVE THE (WIND) POWER!
Blessed with strong, consistent breezes that may soon rival the most gusty coasts of Europe and the United States. Brazil is on track to increase its wind energy capacity fivefold by 2013, further establishing the ethanol and hydroelectric giant as Latin America’s green energy leader.
But for foreign world turbine producers looking to enter Brazil, questions remain about the country’s ability to solve transport issues, develop a reliable supply chain and spur public policy that will make windpower more attractive to investors.
Northern Brazil is home to some of the best easterly wind partners in the world, which allow for the use of lighter turbines that cost less than ones used in the U.S. or E.U. Brazil’s wind market more than doubled its installed capacity between 2008 and 2010 by reaching 900 megawatts. The government’s goal of 31.6 gigawatts capacity by 2025 would lead all of Latin America.
Wind energy auctions in Brazil have placed 3.9 GW of new windpower in the energy pipeline for 2012 and 2013, but the questions begin with Brazilian infrastructure, which may be best described as an underdeveloped tangled mess. Most wind farms will be located in a handful of states in the Northeast of deep South, but manufacturing of parts for turbines have, until now, been spread sporadically throughout the country, particularly in the central states of São Paulo and Minas Gerais.
More than 5.000 kilometers of road lie between turbine manufactures in São Paulo and the wind markets of Rio Grande do Norte and Ceará. Transport is costly on Brazilian highways, which are so poorly maintained in the northern part of the country that many have no shoulders, or haven’t been repaved following major floods.
“Coastal navigation has to be better as well, it is a poor in Brail. Most transport has always been done by trucks,” says Pedro Perrelli, executive director of the Brazilian Wind Energy Association, ABEEólica industry groups will push for new industrial parks to be built in Rio Grande do Norte, where turbine suppliers now located in the south of Brazil could relocate to produce more efficiently.
A major port in the northeast city of Natal also hasn’t been able to handle large turbine components being shipped into that region. Newly-elected government leaders will need to find an expansion solution for this port, which ideally would be counted on as a gateway for turbine parts shipped into the Northeast.
Private lines of investment have been available to developers and turbine makers, but they are expensive. The industry’s ideal is to get loans from the Brazilian Development Bank or BNDES.
But so far, many applicants have been stopped from qualifying because of strict loan requirements that call for a majority of a wind turbines parts and labor to come from within Brazil. Cheaper parts are made in other countries, but this requirement by the bank is meant to help boost production in Brazil. “There’s no cheaper money in Brazil than BNDES,” Perrelli says. “We need to discuss (with the bank) a ramp-up schedule o nationalizing the index o materials used.”
A more clear schedule for energy auctions may also be set up to assure investors of long-term demand. A congressional bill now in play would force the federal government to buy 400MW of wind energy per year, but that amount is low and outdated. The bill was meant to encourage alternative energies, but is too generic to help wind power.
Brazil’s existing network of transmission lines is also considered inefficient, increasing cost for investors and consumers. Government has been encourage to map the wind energy potential throughout the county to show investors what areas clearly offer the best windpower opportunities.
Training manpower for construction and post-construction jobs within the industry will also be a challenge in the Northeast, where some of the poorest and least educated Brazilians populate wind energy hot zones. Companies already invested in Rio Grande do Norte have partnered with a public technical college to create courses for engineers and construction workers. In Ceará, similar public-private training courses are being offered, with the state covering the student’s costs for their first six months.
While significant infrastructure hurdles exist. Brazil’s public and private sectors have the chance to meet these challenges head on. If they do, Brazil could be a leader in the world’s wind energy market in the not too distant future.
