French cosmetics giant L’Oreal will buy power from wind farms in Brazil operated by compatriot energy group Engie, as part of a global programme to reduce greenhouse gas emissions.
A three-year PPA signed between the two companies until December 2021 will see wind power all L'Oreal's operations in Brazil, including the group’s distribution and research centres and its headquarters in Rio de Janeiro, as well as factories and shops across the country.
Aside from wind, L’Oreal will also this year start building a solar PV plant in the state of São Paulo, where its main factory is located, that the company said “will be the biggest in the state”.
Engie is supplying wind power to the cosmetics firm from its 213MW Trairi wind power complex in the northeastern state of Ceará.
Like other wind power assets in Brazil, Engie’s wind farms were built with financing backed by long-term 20-year PPAs won in government tenders, while part of the capacity is allocated to the the non-regulated market, where prices are significantly higher despite the much shorter PPAs.
Engie, which has a 1GW of operational wind power capacity and 8.5GW overall, including coal and large hydro, currently sells around 60% of the power it produces in the non-regulated market. This should continue to grow, as Engie plans to offer all the power from the 261MW Campo Largo wind complex in the unregulated sector when it is built in 2021.
According to L’Oreal, the deal with Engie is bringing some financial advantages, although the main motivation for buying wind power are the company’s global sustainability goals announced in 2017.
“The move towards a sustainable business model … was the driving element to migrate to renewable energy. Initially this involved investments and additional costs, but in the last few years renewable energy has become financially advantageous,” a L’Oreal spokesperson told Recharge.
L'Oreal was already buying power from small-hydro and biomass generators, and recently it set up a 40,000kWh-a-month rooftop solar array which supplies 25% of the research centre where it is located.
Brazil is the only country in Latin America in which L’Oreal is investing in renewable energy. Other countries lined up in the group’s renewables programme are Australia and China.
