Brazil's Wind Power Auction Spurs More Clean Energy Development

While focusing domestically on wind-energy generation, Brazil is part of a larger international movement toward wind power as a primary source of energy. In fact, wind power has seen the highest expansion rate of all available renewable energy sources, with an average growth of 27% per year since 1990, according to the Global Wind Energy Council (GWEC).

Government Support for Wind Power

Brazil’s first wind-energy turbine was installed in Fernando de Noronha Archipelago in 1992. Ten years later the government created the Program for Incentive of Alternative Electric Energy Sources (Proinfa) to encourage the use of other renewable sources, such as wind power, biomass, and Small Hydroelectric Power Stations (PCHs). Such stations use hydropower, the flagship of Brazil’s energy matrix, which comprises around three-quarters of Brazil’s installed energy capacity.

High energy production costs, coupled with the advantages of wind power as a renewable, widely available energy source, have led several countries to establish regulatory incentives and direct financial investments to stimulate wind power generation.   

Growth of Wind Energy under Proinfa

Since the inception of Proinfa, Brazil’s wind energy production has escalated from 22 MW in 2003 to 602 MW in 2009, as part of 36 private projects. Another 10 projects are under construction, with a capacity of 256.4 MW, and 45 additional projects have been approved be ANEEL with an estimated potential of 2,139.7 MW.

Developing these wind power sources in Brazil is helping the country to meet its strategic objectives of enhancing energy security, reducing greenhouse gas emissions and creating jobs. The potential for this type of power generation in Brazil could reach up to 145,000 MW, according to the 2001 Brazilian Wind Power Potential Report by the Electric Energy Research Center (Cepel).

Energy Production

The cost of energy production continues to pose a significant challenge to the growth of wind energy. The price per megawatt hour (MWh) established in Brazil’s auction of wind power reserve supply is R$189, while the cap defined in bidding for power plants of the Madeira River Hydroelectricity Complex was R$ 91 (UHE Jirau) in 2008, and R$ 122 (UHE Santo Antonio) in 2007. These hydroelectricity prices were marked down by up to 35% in the 2008 and 2007 auctions; the energy supply was negotiated at R$ 71.4/MWh in the case of Jirau, and R$ 78.9/MWh for the Santo Antonio plant.

Brazil’s energy auctions are carried out by ANEEL through a delegation from the Ministry of Mines and Energy. In the case of reserve auctions, the objective is to purchase additional energy supply for the National Integrated System (SIN) in order to reduce operational costs of the system. Last year, ANEEL held the first biomass-only reserve energy auction, aimed at incentivizing the use of renewable sources. In that auction, 2,379 MW produced by 31 thermoelectric plants using sugarcane and napier grass were  sold, with the supply beginning in 2009 and 2010, and contracts extending for a 15-year period. The average final price was R$ 58.84/MWh.

Wind Energy across the Globe

The installed capacity of wind energy worldwide is currently 121,000 MW, of which 54% is located in Europe, according to GWEC. Germany maintains the largest installed capacity of wind energy on the continent with 22,227 MW. Wind is also a significant energy source in other European countries, including Denmark and Spain, where it represents 22% and 12% of the total energy capacity, respectively. The world’s largest installed capacity of wind energy is located in the United States with 25,170 MW, followed by Germany, Spain (16,754 MW), China (12,210 MW) and India (9,645 MW).

Brazil’s Commitment to Renewable Energy

Brazil has maintained a tradition of investing in renewable energy sources while reinforcing its commitment to sustainable development and reducing its greenhouse gas emissions. 

Nelson Hübner is the director of Brazil’s National Electric Energy Agency (ANEEL).