Brazil is often associated with ethanol when it comes to alternative energy, but 78 new wind power projects expected to generate around 2,000 MW are starting to make the country’s renewable energy mix a little more varied.
On Monday, Mauricio Tolmasquim, president and CEO of Brazil’s Energy Research Company (EPE), announced that for the first time ever, wind power prices have become less expensive than natural gas prices in Brazil.
The announcement followed the results of energy auctions held last week by Brazil’s National Electric Power Agency (ANEEl).
The auctions resulted in contracts for 78 wind power projects capable of generating 1,928 MW, and priced at approximately US$ 61.9/MWh. This cost per MWh is approximately 19 percent lower than the average price for wind power traded in Brazil last year.
By comparison, the average price for power generated with natural gas is currently R$ 64.17/MWh in Brazil.
In addition to wind power, Aneel auctions last week featured biomass, hydro-electric, and natural gas, for a total of 92 energy projects with investments amounting to R$ 11.2 billion. These projects include a total of 3,962 MW to be generated beginning in 2014.
“That wind power plants have been contracted at two digit prices, below R$ 100 /MWh (US$62.3), showcases the energy market competition through auctions. That wind power could reach these lows vs. natural gas was unimaginable until recently,” said Mr. Tolmasquim. These energy auctions were the first in Brazil for 2011.
Brazil’s wind power potential is estimated at 143,000 MW. Wind power generation grew by 50.5 per cent between 2009 and 2010, but it still accounts for a small fraction of the total with 0.4 per cent. 87.1 per cent of Brazil’s electricity comes from renewable sources, mostly hydropower, which is causing controversy as the country looks to the Amazon to expand hydropower generation.
Think Progress, a top blog focused on climate change and environmental issues, noted that companies such as GE, Siemens and Vestas have opened manufacturing operations in Brazil to avoid import tariff on foreign wind turbines, which has helped push down the cost of developing projects in the country. But it pointed out that the projects still need to get financed and built. “It remains to be seen if developers will be able to make the wind farms pencil out with such low contracts”, wrote Stephen Lacey.
Article by Antonio Pasolini, a Brazilian writer and video art curator based in London, UK. He holds a BA in journalism and an MA in film and television.