Brazil looks at axing wind benefit

Brazilian lawmakers want to eliminate transmission charge discounts for wind projects next year, alleging that they are competitive enough and don't need government incentives.

Wind farms receive a 50% discount on distribution and transmission fees –  a situation challenged by three congressmen from the states of São Paulo and Minas Gerais, where sugar-cane producers want to boost biomass projects.

While proposing scrapping the wind discount, the congressmen want to raise the capacity of other renewables sources that would be able to apply for the discount.

The proposal was approved in committee this week and could be voted on as early as next Tuesday.

Lawmakers are reviewing a presidential decree that clears up the text of the 2004 law introducing the country's current auction system. The government wants to guarantee that participants in so-called A-0 auctions, aimed at existing power plants, could sell uncommissioned capacity and would have to deliver it in the same year,

Overall, 54 amendments were made and the bill's sponsor is suggesting the approval of a bill more than ten pages long compared with the half-page original presidential decree.

Wind leaders immediately denounced the motion.

“The elimination of such incentives would increase by millions of reais the surcharges on wind-power projects, and would certainly hurt a sector that is recently setting up in Brazil and installed hundreds of factories in the country,” Jean-Paul Prates, president of the Renewable Energy Reserch Center in Rio Grande do Norte, wrote in an online column.

Prates says the move has taken the whole wind industry by surprise and he is urging lawmakers from his state to reject the motion.

He believes that it is based on a misunderstanding, because wind's success does not jeopardise other energy sources.