Brazil Congress mulls subsidy cut

Brazilian wind power prices could reach R$150/MWh ($67/MWh), up from current levels around R$120/MWh, the Congress eliminates transmission charge discounts, Elbia Melo, executive president of the Brazilian Wind Power Association (Abeeolica), tells Recharge.

She and other industry leaders have begun lobbying lawmakers after a congressional committee voted to eliminate the 50% discount incentive for wind power as of next 1 January.

Committee members justified their vote saying that wind is now a mature technology and sufficiently competitive without the subsidy.  The bill could go for a vote on the floor of both houses in the coming days.

“It doesn't make sense to scrap the benefit,” she argues. “The strength of Brazil's wind power sector comes from Proinfa [the 1990's subsidized renewable energy program] and from these discounts.”

Melo adds that Brazil is slowly strengthening policies that promote renewable energy, which includes the transmission discount and separate auctions for specific energy sources. Both policies are needed to allow other renewable technologies such as solar PV, biomass and small-scale hydro to also be commissioned.

She said wind power doesn't hinder these other technologies.

The bill would keep the transmission discount for other renewable technologies but raise the capacity threshold for some of them to obtain the benefit.