Auction for offshore wind power to be held next year

Potential investors in the offshore wind power segment are waiting for regulatory definitions from the federal government to start the race for new projects in Brazil’s waters with the usual legal certainty of the electricity sector.

The Brazilian Wind Power Association (Abeeólica) says it is eager to see the regulatory guidelines for offshore wind contracting, as investors in the international market are interested in Brazil. The entity helps in the economic and regulatory structuring to receive the investments and believes that in 2023 it will be possible to make the first competition viable.

“What we did in 2021 and will continue to do in 2022 is to arrange the economic and regulatory structure to receive the offshore investments. We already have companies in Brazil and 46 GW of projects under analysis by [federal environmental agency] Ibama. We will provide structure so to hold auctions in the near future, which I imagine will be in 2023,” said Elbia Gannoum, head of Abeeólica.

The Ministry of Mines and Energy (MME) is working with the Chief of Staff Office to consolidate contributions for the establishment of the first offshore wind power regulation in Brazil. “The work is likely to be concluded by the end of this month,” the ministry informed.

Some companies have actively collaborated in the discussions for the definition of the legislation to be adopted in the country, such as Neoenergia, whose majority shareholder is the Spanish company Iberdrola. With a defined legal framework, the expectation is that projects will move forward.

“We have three projects in the initial phase of licensing studies with the possibility of reaching a capacity of up to 9,000 MW,” the company said in a note.

Even big oil companies are looking to Brazil. Shell Energy has been evaluating the country’s offshore wind potential using its knowledge of the sea environment and with the deployment of those plants outside Brazil, and is also waiting for the regulation of the sector.

“Shell expects to soon report the start of environmental licensing of offshore wind complexes with Ibama, a field in which regulation is already known to entrepreneurs,” said Gabriela Oliveira, renewable energy generation project development manager at Shell Energy.

Ibama has 23 requests for environmental permits under analysis, totaling more than 46 GW of power. However, the institute confirmed that only two have presented Environmental Impact Studies and Environmental Impact Reports (EIA/Rima). The agency has requested further information for the others.

Ana Karina Souza, partner for energy at law firm Machado Meyer Advogados, adds that the projects would have many challenges to be implemented without a stronger intention of the federal government to hold auctions in the regulated market. This gives room to doubts whether the projects would be viable in the free market.

“We have a technology that cannot be developed because of a void, of a regulatory gray area,” she said.

Other structural conditions still need to be overcome. Brazil needs to fix the infrastructure of ports and transmission, since the projects have a very large scale, and the recovery of the economy needs to come with strength so that investments accelerate.

Source: Valor international

https://valorinternational.globo.com/