A decree published by the federal government on the main guidelines for offshore wind projects in Brazil was well received by players in the electricity sector, who said it may unlock investments.
The main point is related with the assignment of the use of physical spaces and natural resources for this type of renewable generation. As previously reported by Valor, giant companies like Shell and Iberdrola are looking to Brazil because of its power generation potential but were waiting for a more secure regulatory environment.
The decree 10,946/2022 says that the Ministry of Mines and Energy must issue complementary rules by June 15, 2022. Experts and international entities say that the measure removes the legal and regulatory risk and helps projects in the Brazilian seas to get off the drawing board.
In a note, the ministry said the decree aims to fill the gap identified by public institutions, companies, experts and organizations of a regulatory framework for the exploration of offshore electric potential in Brazil, especially related to issues about the deployment and the concession model.
For Abeeólica, the trade group that represents the sector, the decree is a crucial advance so that Brazil can unlock investments and deploy offshore wind farms with security for investors, government and society.
“In a sector that is taking its first steps, this security is key, so that companies, society and government know what the technical criteria, requirements, study obligations are, and the agencies that will be responsible for analyzing, approving and formalizing the progress of each stage of the projects, which are more complex than onshore wind farms,” said Elbia Gannoum, head of the association.
Ben Backwell, CEO of the Global Wind Energy Council, said Brazil has virtually unlimited offshore wind resources and wind power companies have already filed for permits for projects totaling 46 gigawatts. This represents an opportunity to meet the growing demand for energy, develop green hydrogen projects, and create large amounts of investment and skilled jobs.
“This decree brings clarity and certainty that the wind power industry needs to move forward and continue to develop large-scale projects off the coast of Brazil, while the authorities prepare a comprehensive system for licensing areas, as well as competitive auctions and other mechanisms for capturing offshore wind power,” he said.
The forecast is that by 2050 Brazil will reach an installed capacity of electricity generation by offshore wind of nearly 16 GW, if there is a 20% reduction in capex from this source, according to the National Energy Plan 2050.
Although the decree is considered an advance for legal and regulatory security, the energy partner of law firm Lefosse, Pedro Dante, questions the feasibility of these projects in the short term and considers it premature to say that all issues are properly addressed and resolved.
“Due to the still high costs of offshore plants, it is still not possible to say that this type of energy source will be competitive in the short term, there is a natural competition in relation to price with renewable energy sources that are already in the consolidation phase in the country, such as solar power and onshore wind power itself,” says Mr. Dante.
Lawyer Rodrigo Machado Santos, a partner at Madrona Advogados, said that the decree was the right choice, since the legislation already deals with the assignment of areas and commercialization of electricity.
“It seems there is no need for a legal framework for additional regulation, especially because offshore generation does not mean a new type of generation, but simply involves issues such as ownership over the areas – which is already provided for in law.”
Source: Valor international