Rio Grande do Sul eyes windfall

Brazil's southern state of Rio Grande do Sul expects wind equipment manufacturers to invest R$250m ($106m) in 2014 to expand local production facilities and build new plants, said Marco Franceschi, energy and infrastructure director of the state's development agency AGDI.

He said that he is in talks with up to five new companies that are studying investing in the state. They include turbine, blade, electrical equipment, converter and control system manufacturers.

“We have the wind, we have the infrastructure and we have a sizable port,” Franceschi said, referring to the port town of Rio Grande.

According to Franceschi, the decision to invest reflects the state government's strategy to fast-track licensing and financing processes, and offer subsidies for land acquisition.

“Through AGDI, we have unified the processes by which investors can quickly meet red-tape requirements,” he said. “They have to talk to one person only.”

To further attract investments, the state is supporting creation of common norms for municipal permits for the wind sector through the association of 23 city governments,  and a technology research park with the Federal University of Rio Grande do Sul.

The association should be formalised on March 17 and the research centre should be announced this week. 

Rio Grande do Sul is one the pioneer wind states where some the oldest plants are located. According to data from power regulator Aneel, it currently has 18 wind farms in operation, with a combined capacity of 513MW, 14% of the country's total.

Another 24 farms with a capacity of 572MW are being built. It has a wind potential of 115GW at 100 metres, according to the most recent wind map.

Brazilian states are in a strong competition to attract investments from wind companies, but because of a federal agreement, they cannot offer aggressive tax incentives. Instead, they offer other advantages such as reduction in bureaucracy, infrastructure and, in Rio Grande do Sul's case, subsidies in the acquisition of real estate.

“We offer strong subsidies in industrial districts for companies wishing to set up shop,” Franceschi said. “One example is that one hectare in an industrial park is priced at R$46,000 per hectare, instead of the market price of R$1m.”

He added that Rio Grande will allow wind companies to start using marine transport to deliver the blades and nacelles to other regions, aside from the fact that companies could also use the structure to export to neighboring Argentina and Uruguay.

So far, the only turbine manufacturer located in the state is Argentina's Impsa. Wobben Windpower (a unit of Germany's Enercon), France's Alstom, Brazil's Engebasa and local engineering Intecnial have tower production facilities in Rio Grande do Sul.