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Renewable Energy World Editors
August 18, 2011
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As renewables across leading global markets strive toward grid parity, wind may have just become the cheapest option in Brazil.
In a government energy auction on Wednesday, 44 wind developers saw their bids accepted at an average price of 99.58 reais per megawatt-hour. That converts to about $62.07. Those wind developments would total more than 1,000 megawatts MW of new capacity. The Brazilian government also accepted bids for one hydro plant (102 reais, $63.58), four biomass plants (102.41 reais, $63.83) and two using natural gas (103.26 reais, $64.36).
According to the Global Wind Energy Council, Brazil had just under 1,000 MW of installed capacity by the end of 2010. The country has seen strong growth in projects under construction and under development, and Wednesday’s news is expected to increase the nation’s wind energy efforts.
The news came on the same day that Danish wind giant Vestas announced that it was opening its first assembly plant in Brazil.
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August 25, 2011
So much for US subsidies and incentives distorting the market. While wind power prices in the US have remained high due to indefinite subsidies; in Brazil where there are no subsidies, just a higher tariff ceiling wind power prices have fallen by 50% over the past 5 years. As more turbine manufacturers install themselves here, prices will continue to fall.
For five year Wobben Windpower (Enercon) was the only manufacturer in Brazil and wind power prices remained high due to inflated turbine pricing. Then in 2009 IMPSA Wind came in (an Argentine company assembling German Vensys turbines, now Vestas.
Given good wind conditions wind energy should be coming down to the $45.00 to $55.00 /mW range. They were around 55 euros back in 2003, but the dollar has lost ground against the euro. However, manufacturers in the US should be able to produce equipment for the same price in dollars as the Europeans do in euros, i.e. 1:1 exchange rate, but subsidies have distorted the market. In this respect, the renewable energy companies are no different than any other company; they'll always cry for subsidies whether they need them or not.