Brazil to identify supply chain needs

Brazil's federal government in the coming weeks should conclude a study of the wind power sector's supply chain in order to identify bottlenecks and investment needs.

The study will come as six foreign and one Brazilian turbine makers try to comply with national content rules. This is a condition for them to obtain below-market financing from the national development bank BNDES for acquisition of turbines.

The rules give the vendors until January 2016 to meet on a phased basis up to 70% local content for blades, tower, nacelles and hubs.

“Each manufacturer signed a term of responsibility and they know all the steps that need to be taken,” says Antonio Tovar, head of BNDES alternative energy department, reaffirming that the bank would not ease national content rules.

“There might be turbine manufacturers who want to ease these rules and others that have carried out the investments needed. Changing the rules would hurt those turbine makers that are making the needed investments,” he adds.

Since 2013, turbine makers in Brazil have announced assembly and production plants for nacelles and towers, and other facilities. The last company to do so was Vestas, which will invest R$100m in a new facility to produce its 2MW turbine with 70% local content.

The wind industry must increase output to meet developers' annual goal to bring an average 2.2GW of generation capacity into full commercial operation through the end of 2018.

Brazil's installed capacity is forecast to rise from some 3.4GW in January to 14.4GW in 2018, according to data from Brazilian Wind Power Association (Abeeolica).

The turbine vendors are facing supply bottlenecks for forged and cast pieces, and certain other components, that the study will identify.

“The more public information that is available, the more the sector strengthens itself,” says Tovar.

Abeeólica has also hired a consultancy firm to identify bottlenecks in the industry that is due for completion in the coming weeks.

Once the bottlenecks and industry needs are identified, BNDES is ready to finance machinery acquisition and plant expansions to the hundreds of third level suppliers, says Tovar.