Brazil transmission delays leave 622MW of wind stranded

A mere 274MW of capacity is operating out of the 1.8GW contracted at Brazil’s first wind tender in December 2009 — all of which was due to come on line this month.

Developers have been unable to connect 622MW — which is otherwise ready to start — to the grid, as transmission lines have not been completed. The remainder is still being built.

Some deadlines have been pushed back by the Brazilian electricity regulatory agency, Aneel, but developers of many projects may end up facing penalties for the delays.

Renova Energia, Dobrevê and CPFL will collect revenues for the 622MW they have built, as the developers are not at fault for the delay in building transmission lines. State utility Chesf is responsible, but blames the slow issuing of environmental licences for being behind schedule.

However, industry sources tell Recharge they blame poor management at Chesf for the massive delays to two shared transmission systems — known as ICGs — which are expected to cost taxpayers up to R$500m ($245m).

The 622MW of capacity is now expected to be connected in September 2013.

Aneel director Nelson Hubner wants an end to ICGs, but Elbia Melo, president of the Brazilian wind-power association, ABEEólica, disagrees, saying the concept is solid.

“The cost of transmission lines is high,” says Melo. “ICGs bring together nearby projects to share and lower the cost of investment.” That, in turn, helps developers compete at the regulated tenders.

“The ICG was one of the best creations of the electricity model,” says Melo.

“There have been delays, but that doesn’t make the theory bad. It makes no sense to talk of ending it.”

She notes that the two delayed ICGs were part of the government’s first wind tender, when there were many unknowns about the process. Melo adds that better planning would improve the situation.