A Norwegian joint venture has started operations at the 531MW Mendubim solar plant in Brazil, with future output earmarked mainly for decarbonising a giant aluminium refinery in Para, the Brazilian state that has arguably suffered the heaviest environmental impacts in recent times.
Around 60% of Mendubim's power will be sold on a 20-year dollar-denominated power purchase agreement (PPA) with Alunorte, one of the world’s leading suppliers of alumina for the aluminium industry.
"Mendubim represents an important contribution to Equinor’s diversified energy offering in Brazil that includes a robust oil and gas portfolio and an attractive renewables position,” said Veronica Coelho, Brazil country manager for oil major Equinor, one of the partners.
The remaining production will be sold in the power market in Brazil.
The project is developed and operated as a joint venture between Scatec and fellow Norwegian companies Equinor and Hydro Rein, securing 90% of the equity equally between them. The other 10% is held by Alunorte.
Equinor said the asset is expected to deliver real base project returns in the middle of the company's guided range for renewables of 4-8%.
Olivier Girardot, CEO of Hydro Rein, a unit of aluminium and renewable energy producer Norsk Hydro, described the Alunorte project as "one of the largest decarbonisation projects in the world".
Through Mendubim, Equinor said it was entering the de-regulated power market in Brazil for the first time.
Equinor described Brazil's power market regulation as "ongoing", with de-regulated transactions now accounting for about 40% of total consumption.
Equinor’s renewables position in Brazil includes three assets in commercial production.
These are: the 162MW Apodi solar plant (44% of net capacity), the 531MW Mendubim solar plant (30%) and the 223MW Serra da Babilônia 1 onshore wind farm (100%).
Equinor’s fully owned subsidiary Rio Energy has an additional 1.5 GW pipeline of solar and onshore wind projects under development.
(Correction: an earlier version of this article incorrectly described the joint venture in question as Equinor-led).
