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Latin America Report: Weighing Brazil's Domestic Content Provision for Wind Power

Wind turbine manufacturers are balking at a new rule in Brazil requiring them to buy or make parts domestically to qualify for lower-cost loans from the Brazilian Development Bank (BNDES), which could put a crimp in the anticipated growth of one of the more promising market regions for wind energy.

The new rules, announced in December, could drive up turbine prices by 20 percent or more if companies have to choose local components instead of lowest-cost imports. Bloomberg quotes representatives from Suzlon and Renova Energia that more than half the 13 suppliers operating in Brazil may actually opt out. Another Renova exec suggested suppliers might take two years to determine if the new rules will be economically viable. Meanwhile, GBT Brasil SA, a joint venture of Global Blade Technology and Feel Energia SA, says it will begin producing domestic wind turbines by the end of this year. And Acciona recently opened a turbine assembly plant in Brazil's northeastern city of Salvador, capable of producing 135 hubs/year for wind turbines, sourcing domestically produced blades.

Still, as the fifth largest market for wind turbine installations, Brazil's market won't be abandoned. Bloomberg says Suzlon "intends to comply with the new rules," while Gamesa and Acciona both expressed commitment to this important market. Vestas is said to be mulling whether to comply with the new rules.


IN THE NEWS

IDB Financing Solar PV in Chile: The Inter-American Development Bank (IDB) has approved $41 million in loans for construction and operation of three private-sector solar PV plants in the Atacama Desert, one of the region's first large-scale solar energy projects. Half of the loan amount will come from the Canadian Climate Fund for the Private Sector in the Americas, which the IDB administers. The plants in the Pozo Almonte and Calama Photovoltaic Project will supply power to the Collahuasi and Codelco mining companies, with a peak generating capacity of 26.5 megawatts.

Wind Power Project Financing for Peru: The Overseas Private Investment Corporation (OPIC) has approved a $193 million loan to support Peru's first large-scale wind project connected to its power grid. The 114-MW, 62-turbine project spans two wind parks on Peru's northwestern coast and is backed by ContourGlobal in the U.S.

Solar-Powered Irrigation, from the US to Nicaragua: Representatives from the U.S. are traveling to rural El Jocote, Nicaragua to help install solar irrigation systems. The effort is arranged by Green Empowerment, a Portland, OR-based nonprofit. "It's a chance for Portlanders who usually deal with only their small part of extremely sophisticated, commercial-scale renewable energy to get their hands dirty building a project from start-to-finish," explained trip leader David Lindoo of Sunlight Solar Energy. The work also improves life for local families, who can pump water to grow vegetables to diversify their diets and sell surplus food for extra income. Green Empowerment has been working with the Nicaraguan-run non-governmental organization Asofenix since 2002.

Renova's Twin-Tech Solar Proposal in Brazil: Renova Energia has petitioned the Brazilian Electricity Regulatory Agency (ANEEL) to build eight solar PV plants, incorporating both polycrystalline silicon and thin-film solar technologies, with an installed capacity of 241.92 MWp in the southeast part of the state of Bahia.

Mexico Approves Solar PV on Schools: The Mexican Chamber of Duties has approved reforms that define ways to promote renewable energy projects at public schools in small communities, both for self-consumption and to sell surplus to the municipalities.

Solar-Powered Desalination in Chile's Atacama Desert: Chile's first solar-powered desalination plant is being proposed by state-sponsored entity Fundacion Chile, in the Lluta Valley to treat river water and boost local agriculture.

Crowdfunding for Guatemalan Solar Energy: Quetsol has been distributing low-cost solar power kits to Guatemala's rural communities since 2010, but apparently bank financing has been a big problem. So the company is launching a new "pay-as-you-go" kit using cell phone payments and activation codes. So far about $40,000 of a $50,000 goal has been raised through Indiegogo.

Brazil Wind Farm Online, But Struggling: Cia. Hidro Eletrica do Sao Francisco's (Chesf) first wind farms are now producing power but at one-third capacity and months behind schedule. The entire 90-MW capacity of the projects at Sao Pedro do Lago, Pedra Branca, and Sete Gameleiras were supposed to be online by the end of March, but the company has to buy power on the spot market to make up for months of undelivered electricity. Bloomberg points out that Chesf is also late in connecting about 620-MW of other companies' wind farms in the region.

Wind Farm Expansion in Honduras: The Export-Import Bank of the United States has approved a $28.6 million direct loan to a Honduran power company to acquire six wind turbines from Gamesa, extending a project originally supported in 2010 for long-term financing of the Cerro de Hula Wind Farm in Santa Ana. The Cerro de Hula Wind Farm now produces about six percent of the electrical power in Honduras; and after this transaction will have total installed capacity of 126 MW.

France's Akuo Energy Investing in Uruguay Wind Farms: Akuo Energy has begun construction of two wind farms in Uruguay with a total $205 million investment, in part funded by international investors. The projects include a wind production site Generación Eolica Minas in the Lavalleja district east of Montevideo, acquired from Sowitec, and one located about 100km north of Montevideo. Completion is expected by 4Q13, with total estimated production of 92 MW.


A DEEPER LOOK

Enel CEO: Latin America Offsets European Slump: Fulvio Conti, CEO of top Italian utility Enel SpA, says the company is adapting its strategy after three years of weak markets to focus more on Latin America and Eastern Europe. Bloomberg reviews the company's strategy and market watchers' analysis of the company's core market struggles and blueprint for future success. Case in point: Enel Green Power has connected its 90-MW Talinay plant in Coquimbo able to generate up to 200 GWh annually, and is building another 90-MW wind farm in Valle de los Vientos (region II of Antofagasta) which will bring its total installed capacity in Chile to 272 MW. Meanwhile, Enel also has secured a $100 million five-year loan to help cover cost for its planned investments over the next few years in Chile. The company says its total investment in wind projects in Chile is around $300 million.

Barefoot Solar in the Chilean Highlands: Women from three indigenous communities in the Chilean highlands will install and maintain solar lighting systems. They will be tapping training they received last year at the Barefoot College in India, which is training rural women from all around the globe to adopt solar lighting in remote off-grid villages. The Barefoot school's initiatives have provided solar lighting for an estimated 450,000 people across various regions, training 700 women from 49 countries in Asia, Africa, and Latin America to become "barefoot solar engineers".

Iberdrola, Neoenergia Building Three Wind Farms in Brazil: Iberdrola SA, Spain's biggest utility, and Neoenergia SA have built three wind farms totaling 80-MW capacity in Brazil, part of a planned 10-farm, 288-MW collaboration. The new sites are the 20-MW Mel II project, and Caetite II and Caetite III ventures each at 30-MW.

Solarpack Pledges 25 MW Solar PV in Chile: Solarpack says it will build and operate a solar project in Tarapacá in Northern Chile for local mining company Compañía Minera Doña Inés de Collahuasi. The project involves two solar plants, one with 9 MW and another with 16 MW generation capacity; the two partners also are creating a 300 kW solar PV R&D center in Patache to test solar PV technologies. Meanwhile, in Peru, Solarpack has inaugurated two 20-MW solar power plants in the Tacna and Moquegua regions of Peru, and has received a PPA for a 16-MW solar PV plant in the province of Mariscal Nieto


ON THE HORIZON

Measuring Chile's PV Project Bottleneck: There's a huge gap between Chile's solar PV projects in development and those under construction, as developers grapple with technical specifications, regulations over base load, and the costs of transmission and connection. Financing utility-scale PV is a relatively new phenomenon as well, and international and regional banks are cautious in their approaches.


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IN CASE YOU MISSED IT

Feb. 20-March 6, 2013 Latin America Report: Uruguay, Future Home of the World's Cheapest Solar Energy

Jan. 31-Feb. 19, 2013 Latin America Report: Mexico Just Scratching the Surface of Solar Demand

Jan. 18-29, 2013 Latin America Report: Mapping the Solar Energy Landscape

Jan. 1-17, 2013 Latin America Report : Canadian-Led Consortium Taps Solar Power from Ecuador

Lead image: Brazil flag in the wind, via Shutterstock

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