Brazil expects 3GW wind sign-on

Brazilian wind power developers are expected to sign 3GW of new contracts at the three auctions scheduled for this year, said Sandro Yamamoto, technical director at the Brazilian Wind Power Association (Abeeólica).

Brazil will hold an A-3 auction on June 6, an A-5 auction in September and is preparing a reserve auction for some time in the second half, which will include solar power.

“We expect 1GW to be commissioned at each of the three auctions,” Yamamoto says.

This is below the 4.7GW of new wind projects that signed contracts after last year's three auctions, but above the 2GW annual average commissioned at regular auctions since 2009.

Yamamoto also said that investment in wind power has picked up again, reaching $1bn so far this year, putting it on a pace to top the $2.35bn invested in Brazilian wind last year. In 2012, investments reached $3bn, according to data from Bloomberg New Energy Finance.

The new wind projects contracted this year at the A-3 and reserve auctions need to come on-line in 2017 and, from the A-5, in 2019. So far, new wind contracted at the auctions extends to 2018, when just over 2.3GW are expected to come on line.

2017 looks to be the worst year for new wind projects, with just 249MW commissioned to start operations because of the low number of power sales made at the auction in 2012, said Yamamoto.

“This year's A-3 and reserve auctions will fill the gap in 2017”, he said.

So far, 6.2GW of new energy projects have been registered for the A-3 auction in June.

This is well below the 9GW registered for the A-3 in 2013.

According to Yamamoto, the decline occurs as wind developers are wary of risks due to delays in the construction of transmission links.

“Developers are prioritizing the A-5 auction because, since 2013, they have to guarantee the transmission links and will be penalized if they are not ready in time," he says.

A five-year period is ample time for new transmission lines to be built, Yamamoto adds.

There are over 1GW idle, link-less wind power plants in Brazil, specially in Brazil's northeast, the region with one of the best wind potential. Most of the delayed lines and substations are behind schedule by 2 years.

Brazilian wind power developers have a portfolio of projects of over 16GW.