Brazil - Wind energy booms and is turns out to be cheaper than gas

Brazil's current 1,400 MW of installed wind power represent only around 1 percent of its total capacity. Nonetheless, it is slated to grow almost eight-fold between 2010 and 2014 to reach 4.2 per cent, according to wind energy association ABEeolica.

EPE expects Brazil's total power consumption to rise 60 per cent between 2010 and 2020, reflecting Brazil's brisk economic growth and expansion of its middle class. ABEeolica expects 25 billion reais in wind turbines investments between 2009 and the end of 2013.

Vestas, Spain's Gamesa and France's Alstom have invested in manufacturing facilities to build wind turbines in Brazil, while General Electric and India's Suzlon Energy are studying similar projects.

Brazil's A-3 energy auction, a competitive tender between several energy sources, took place on Aug. 17 and saw an average price for wind farm projects of below 100 reais/MWh (or less than $63/MWh). Brazil's A-3 energy auction, a competitive tender between several energy sources, took place on Aug. 17 and saw an average price for wind farm projects of below 100 reais/MWh (or less than $63/MWh), according to the Brazil Wind Energy Conference (BWEC). The overall average price was R$102.07/MWh, with 1.5 GW of energy contracted in the auction at a total price of R$29.14 billion.

The bulk of the energy offered during the auction was either wind power or natural gas. Of a total of 2.7 GW of potential capacity approved to participate, wind turbines represented 39% and natural gas represented 38%. In total, there were 51 successful participants, of which the large majority - 44 - were wind projects.

The key electricity utilities contracting to buy the energy included Companhia Energetica de Minas Gerais, which will buy 25.2% of the total; CPFL Piratininga, which will buy 11.07%; and Amazonas Energia, which will buy 10.81%.

The 44 wind farm projects have committed to supply a total of 1,068 MW of energy to the Brazilian electricity grid under the terms of the auction, at an average price of R$99.58/MWh, which was below the expected price. The average wind energy price was 23.1% below the average in 2010's auction (R$130.86/MWh) and 28.36% below the maximum stipulated price, according to BWEC. The Reserve Auction, for wind power only, takes place today.

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